Strange Pricing Details Can Bedevil Medicare Beneficiaries

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Pharmacist Gina Upchurch knows all the ins and outs of the Medicare prescription drug benefit and was sure she discovered something very wrong:  using the government’s online plan finder tool to help seniors compare dozens of 2014 drug policies, she noticed that some insurers charge higher prices for a prescription filled every two or three months compared to the same drug bought every month.

You’re buying less and paying more,” said Upchurch, executive director of Senior PharmAssist, a nonprofit group in Durham, N.C.

Seniors have until Dec. 7 to sign up for drug coverage next year. Medicare advocates urge beneficiaries to compare plans each year because they may find a way to save money, but many people find the process so complex that they don’t switch plans.  Medicare’s plan finder allows seniors to narrow their choices by entering their drugs, dosages and pharmacy preferences, to obtain a list of available plans and their premiums, deductibles and drug costs.

Eye drops, creams, or inhalers are drugs that can last more than a month, although some insurers don’t offer discounted pricing for other than 30 days, said Upchurch.  For example, under one plan she reviewed, a beneficiary who has a monthly prescription for eye drops would pay $7 a month during the initial coverage period to get the drug, while another person who has a prescription for the drops to be filled every 60 days would pay $51.  She also said that two plans she compared charge $40 or $45 for three vials of insulin every month in the initial coverage period, and $575 every two months.

She noted that seniors sometimes can get the lower prices if they use pharmacies or mail order programs designated by the insurers, rather than just picking one themselves.

Although price disparities might be confusing, a Medicare spokesman said, they are aimed at providing more accurate information about the plans. “These features are not problems with the plan finder.”

He pointed out that a footnote on a different web page with plan details explains why a small supply of a drug can cost more than a larger one: “This drug is covered by the plan, however, the plan does not offer a benefit for the frequency and pharmacy type you selected.  Therefore, the cost displayed is an estimate of the full cost of the drug for the frequency entered.”

If seniors are taking a medication with a frequency other than once a month, they should call the drug plan to verify costs and ask if there is a lower price at the plan’s preferred retail or mail order pharmacy, said Fred Riccardi, director of client services at the Medicare Rights Center, a consumer advocacy group in New York City.

“But people shouldn’t have to run around to different pharmacies,” said Upchurch.  “It would be better if Medicare required plans to cover whatever supply a provider prescribes.”

Healthcare.gov – Real Life Winners and Losers

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It’s been over a month now since the disastrous start of Healthcare.gov, the seriously impaired federal health insurance marketplace.

And what a turn of events it’s been. For the first 16 days, a federal government shutdown largely deflected attention from the website’s problems. But since then, three congressional hearings have been held — and more are planned. Political pundits are anointing winners and losers (mostly losers) and trying to predict how the fallout could affect congressional elections next year.

Aren’t we all more interested in real-life winners and losers, people whose lives will be changed for better or worse because of the Affordable Care Act?

Clearly, if the website problems persist for much longer and people are unable to sign up for coverage, the list of losers will grow longer by the week. Consumers will lose because they won’t be able to enroll in health plans. Insurers will lose because they will have far fewer customers than anticipated. Hospitals will lose because the law cuts back their reimbursement for care they give to the uninsured. And on and on.

But for the moment, let’s assume some — or most — of those problems will be fixed by the Nov. 30 date promised by the Obama administration.

Winners

On a very obvious level, winners include young adults who can now remain on their parents health plans until age 26.

They include consumers with medical ailments who have been denied health insurance because of pre-existing conditions.

They include residents of states that opted to expand their Medicaid programs for the poor to cover those with incomes of up to 138 percent of the federal poverty level ($15,856 for an individual and $32,499 for a family of four).

Losers

By contrast, losers include those with lower incomes who live in states that decided not to expand their Medicaid programs. The Daily Briefing run by the consulting firm The Advisory Board Co. had a smart look this summer at which states will have the most uninsured residents in 2016. Being uninsured means you’re losing out.

Also sure losers are undocumented immigrants, who are ineligible for benefits or subsidies under the act.

And for now, at least, small businesses lose out because of the Obama administration’s ongoing delays launching a health insurance marketplace for small businesses. (Healthcare.gov, by contrast, is an insurance marketplace for individual consumers.)

Too soon to say

Another group that many commentators count as losers are the hundreds of thousands of consumers who have received cancellation notices from their individual health insurance companies because their policies don’t meet criteria set forth in the Affordable Care Act.

Probably should hesitate calling all of them losers because some of them will be eligible for subsidies from the federal government to offset the cost of their new health insurance, and others will pay less in the new marketplace for better coverage. To be sure, some people clearly will lose out because they will pay more for their coverage — and their benefits won’t be all that much better to offset it.

What others say

The New Yorker’s Ryan Lizza had an interesting piece this week in which he spoke to economist Jon Gruber, who broke down winners and losers this way:

About eighty per cent of Americans are more or less left alone by the health-care act—largely people who have health insurance through their employers. About fourteen per cent of Americans are clear winners: they are currently uninsured and will have access to an affordable insurance policy under the A.C.A.

But much of the current controversy involves the six per cent of Americans who buy their own health care on the individual market, which the A.C.A. has dramatically reformed. Gruber argued that half of these people (three per cent of all Americans) will have little change to their polices. “They have to buy new plans, but they will be pretty similar to what they had before,” he said. “It will essentially be relabeling.”

The other half, however, also three per cent of the population, will have to buy a new product that complies with the A.C.A.’s more stringent requirements for individual plans. A significant portion of these roughly nine million Americans will be forced to buy a new insurance policy with higher premiums than they currently pay.

Economist Justin Wolfers tweeted the previous few paragraphs as a chart:

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