Tuesday, September 8, 2009

Obamacare and Medicare Drug Coverage Premiums


Tell Congress No Government-Run Health Insurance

Alert: If the health-care reform bill under consideration in the House of Representatives becomes law, seniors will pay Medicare prescription drug program premiums that are 20-percent higher than they would be under current law, says the Congressional Budget Office.

The increase in premiums will start with an average 5-percent hike in 2011 and reach 20 percent by 2019.

The CBO estimated the increase in premiums in response to an inquiry from Rep. Dave Camp (R.-Mich.), the ranking Republican on the House Ways and Means Committee, who wanted to know how changes to the Medicare system that are incorporated into the House version of the health-care reform bill would impact the premiums paid by seniors for their prescription drug benefit mknown as Medicare Part D.

"Overall, CBO estimates that enacting the proposed changes would lead to an average increase in premiums for Part D beneficiaries, above those under current law, of about 5 percent by 2011," CBO Director Douglas Elmendorf said to Camp in a letter. "That effect would rise over time and reach about 20 percent in 2019."

The increase in premiums would be tied to increased coverage that closes the so-called doughnut hole in current Medicare prescription drug coverage.

The doughnut hole works like this: Once a senior's total drugs costs--what Medicare pays, plus the deductible and co-payments--exceed a certain amount ($2,700 in 2009), Medicare will cover no more of the person's drug costs that year until the person spends a certain amount out of his or her own pocket ($4,350 in 2009). When a senior reaches the upper threshold of the doughnut hole, catastrophic drug coverage kicks in automatically and Medicare pays 95 percent of the person's additional drug costs for the remainder of the year.

Under the health care bill in the House of Representatives, H.R. 3200, the doughnut hole would be phased out by 2022, when Medicare Part D would cover prescription drug purchases within the window it does not cover as of now.

"Beyond the 10-year budget window, the premiums would increase slightly more until the doughnut hole was eliminated in 2022, beyond that point, enrollees premiums would grow along with the cost for covered drugs," says CBO.

The change in the rules would have a varying net financial impact on individual seniors, depending on the volume of their prescription drug use.

"Of course, the effect of total spending would vary among beneficiaries: Those who ended up purchasing a relatively small amount of drugs in a year would pay more in additional premiums than they would gain from lower cost sharing, while those who purchased a relatively large amount of drugs in a year would gain more from lower cost sharing than they would pay in higher premiums,' says CBO.

About 3.8 million seniors were subject to the doughnut hole in 2007, according to the Center for Medicare and Medicaid Services (CMS).

Rep. Camp argues that most seniors would suffer a net financial loss under the change envisioned in the health-care bill.

Among Medicare Part D beneficiaries, he said in a statement citing data from CMS, 10.9 percent would save money under the Democratic health bill, while about 76 percent would pay more.

"Health care reform should make health care more affordable, not more expensive," said Camp. "Clearly, it is time to scrap this bill and start over with open, bipartisan talks."

However, Robert Kocher of the President's National Economic Council said in a recent White House video that prescription drugs will become less expensive.

"You will have lower drug costs," Kocher said. "Right now in the Medicare program, when you reach the point at which Part D can't cover a drug, you have to pay full price. Under insurance reform, you will pay lower prices for those pills you take."

However, CBO said in its letter to Rep. Camp that the new rules would cause drug manufacturers to increase prices on new breakthrough drugs.

"Drug manufacturers would be constrained from increasing prices for existing drugs but could offset the rebates they would be required to pay for full-benefit dual-eligible individuals by charging higher prices for new drugs particularly for breakthrough drugs (the first drugs that use new mechanisms to treat illnesses)," said CBO. (CNSNews)


Government Corruption said...

We hear the screaming wild orangutans out there making noise about WHAT? Don't touch my health insurance, government keep your hands off my health-care, Socialist health care does not work, Obamacare sucks, etc...blah, blah blah.

If those who have this compelling need to be LOYAL to TOP executives of an Insurance industry that does absolutely ZERO to heal those in need, instead they rack in MULTI-MILLIONS in SALARY, BONUSES, PERKS, and make MULTI-BILLIONS ($14 BILLION 2nd QTR2009) in profiting from denying coverage
to their policy holders and "just saying NO" to doctors' recommendations for care. These are the loyalist that are okay with the HIGH PREMIUMS and out of pocket expenses-- then by ALL means, we say, KEEP your healthcare insurance! You must maintain your LOYAL STATUS, of course.

As for myself, like many millions of other Americans that want a SOCIALIST/Government run Health Care program in place, WHY can't we have it? Why, are we then FORCED by the Insurance industry and the WHORES in the legislative branch to give in to this SCAM FOR PROFIT? The whole idea of CAPITALISM is COMPETITITION; HOW can we have competition within a MONOPOLY?

FierceHealthcare reports the following top 10 CEO salaries for 2008.

* Ron Williams – Aetna – Total Compensation: $24,300,112.
* H. Edward Hanway – CIGNA – Total Compensation: $12,236,740.
* Angela Braly – WellPoint – Total Compensation: $9,844,212.
* Dale Wolf – Coventry Health Care – Total Compensation: $9,047,469.
* Michael Neidorff – Centene – Total Compensation: $8,774,483.
* James Carlson – AMERIGROUP – Total Compensation: $5,292,546.
* Michael McCallister – Humana – Total Compensation: $4,764,309.
* Jay Gellert – Health Net – Total Compensation: $4,425,355.
* Richard Barasch – Universal American – Total Compensation: $3,503,702.
* Stephen Hemsley – UnitedHealth Group – Total Compensation: $3,241,042.

I, for one, do not wish to contribute to some insurance exec or company that profits from HUMAN pain & suffering (as a Christian, I know Jesus would be disgusted); INSTEAD,I want my money going to pay the salaries that will support the Specialist down to the orderly over to the development/research/technology and other PERTINENT departments that contribute to the full healing process. With the funds that may accumulate, we can pay incentives, BONUSES & PERKS to those that have done an excellent job (reward by merit and accountability), increase funds for extensive health care recruiting, education, training, and more clinics and hospital facilities.

Now that is progress, and that is AMERICAN!

undertaker said...


Your points are well taken and an integral part of the deficiencies of the current system. However, the salaries and bonuses are a very tiny percentage of the problem if you add them all up and then compare them in total to the annual figures.

Tort reform, reduction of medicare fraud and allowing insurance competition across state lines are the three steps that would help reduce the costs of health care overall.

If you had an apartment complex that fell ten percent short of serving the people who wanted to occupy the complex, would you destroy the complex and completely rebuild a new one just ten percent bigger? I think not.

Think about this. If medical providers were given an incentive to treat the uninsured, they would be treated. Example: An uninsured person has a common cold and congestion. A primary health care clinic treats the patient after the diagnosis. Normal charges for an insured patient would have been $100. Why not give the medical provider a tax credit of $45?

I assure you, under such an arrangement, the ten percent shortfall in service availability would quickly disappear at a cost far less than the proposed reforms.

There are ways to reform the system without destroying what works fairly well.

Mad Mom said...

Well said UT.

Gov, go live under the nationalized healthcare of other countries. It's great if you are young and healthy. It's terrible if you are old and sick. If the citizens of those nations can afford it after paying their exorbitantly high taxes for their FREE healthcare, they come here for their surgeries, and their cancer treatments when they need it. They take advantage of the innovation of American ingenuity to acquire the newest biologic therapies and medical devices, although their countries won't often pay for them for their patients. It's a bummer for them.

UT has the right idea. Too many ill-informed people are willing to throw out the baby with the bath water.

Kathy said...

MadMom, I'm going to take exception to one of your statements, that being that nationalized healthcare in other countries is great if you are young and healthy. You pay a ton in taxes for these nationalized programs and that goes for the young and healthy. Not such a great deal at all.

I know of someone that uses the NHS and pays 62% of his wages in taxes.......free healthcare it is not!