It sounds like the good Professor of Public Health can't do basic math. He says Medicare Part D costs have risen 72% over the past decade. He also says the number of participants has DOUBLED over the same period. This implies that per capita costs have actually FALLEN by 14%. Instead of a budget-buster, Medicare Part D sounds like a bargain to me!
13
Since I'm still working at 67, I can stay on my employer's health plan. One of the drugs I take costs over $2,000 per month, although I pay $20 for a three month supply, no donut hole nonsense. Now I need to decide do I just keep working full time - I can work 3 days a week with full benefits - or retire into the tender mercies of medicare.
One commenter mentioned that some pharma's have setup charities to help with the cost of drugs. That's true, but our stupid federal government has a law against offering those programs to people on medicare or other government programs. One pharmaceutical company tried covering people with their assistance program ans was fined millions.
American exceptionalism, indeed!
16
TRUMP WAS BLOWING SMOKE When he talked about leaving Medicare and Social Security alone. What's needed clearly is a renegotiation of medication prices for sale to seniors--to all people in the US for that matter. Also, what's needed is government programs to develop vaccinations to prevent epidemics likely to occur due to new bacteria and viruses traveling rapidly around the globe. Drug companies focused on quarterly stock earnings are neglecting the safety of people in the US of all ages. There was no preparation for the flu epidemic of 1917, that killed huge numbers of people globally. Well that will probably happen again because Big Pharma decided that profits were more important than US homeland security. It is a matter of great urgency, since epidemics can kill many more people than foreign wars, and other major causes of death and injury in the US including gunshot, fatal auto accidents and opioid overdoses. The number of military who have died in Afghanistan and Iraq over 16 years is dwarfed by the number killed here in the US domestically every year!
5
Once again the politicians sold out the public to aid the corporations and their own pockets. . Drug companies bought and sold politicians for $$$ that they made with the clause that the government could not bargain for drug prices.
So much for by,for, and of the people. It's $$$$ people.
16
Medicare for all and the government negotiates drug prices. Problem solved. Whiny greedy drug companies can just shut up.
21
Capping drug prices and profits like they do in the rest of the civilized world would help. Single-payer would help more. Go back to public funding of research for medical care and drugs, and let us reap any profits, too.
21
What do we expect when our government is run by big business with their lobbyists writing the majority of the bills? The bills are signed, sealed and delivered by the corrupt members of Congress who get elected simply to enrich themselves. Where else can a pauper get elected to Congress and come out a few years later as a multi-millionaire and land a cushy job where they make millions more?
10
The big problem is that when someone has existing health insurance then gets to Medicare age Medicare becomes the primary payer. When my mom became ill I was shocked that her existing insurance was only picking up the slack. Why is the government giving the insurance companies this obvious welfare? I know the answer, campaign contributions.
8
The main thrust of this piece is the revelation of how insurance companies push patients into the catastrophic range, which saves the insurer and the patient lots of money, while passing the large drug costs onto Medicare (= taxpayers). However, IMHO, it also enables drug manufacturers' artificially high prices. The article makes no mention of the issue of drug pricing or the prospect of Medicare negotiating about drug prices, which is so far not allowed by law.
14
I would like to correct my math on my previous post. Paid from S/S medicare part D $448.80, Express Scripts $550.20 plus $350.00 deductible. At this point I have paid $1,299.00. Now Express Scripts has paid thru May for prescriptions $317.87 and me $667.40 for a total of $987.27. So from Jan. 2018 thru May 2018 I personally have paid $1,966.40 and I have 7 months to go. Because I was just recently given 2 expensive drugs I can expect to be in donut hole soon. This is no bargain and as stated before I pay the majority of the cost for my generics and I have stopped some medications trying to stop the flow of red ink.
4
Ostensibly the problem has to do with an economic system that offers drug companies a loophole, enabling them to shift costs back onto the taxpayer. The unspoken problem is that the government is in the back pocket of the pharmaceutical industry. The proposed solutions are all sensible -- negotiate with the drug companies, single payer, but these are all pipe dreams in a country which is essentially controlled by big industry.
Therefore, the only reasonable solution is to work towards developing health systems which emphasize non-pharmaceutical solutions to health problems. This is already a small but growing segment of the health care industry. There is a growing realization that drugs are not an appropriate solution to many if not most health problems, and that lifestyle changes, including diet, exercise, mind-body therapies, and a variety of far cheaper and more effective therapies are readily available and as good or superior to drug therapies. The pharmaceutical industry will try to discredit them, but the truth can be suppressed for only so long. The solution isn't better regulation of the pharmaceutical industry -- it's reducing dependence on the pharmaceutical industry.
9
@Samantha
Yes. And no. I fail to see how the lifestyle changes you list are going to change the onset and course of Parkinson's disease and other neurological disorders that disproportionately afflict the elderly. Are the drug interventions for them considered catastrophic? I do not know. I will ask my mostly male friends who are so afflicted if this is the case next time I see them.
On the other hand, if you are that unfortunate soul who has had chickenpox, it will serve you well to hie yourself to the pharmacy for the Shingrix shot. Wait, that's a pharmaceutical intervention also. It is a slippery slope to advocate that one is "guilty" when needing medical intervention. I am also an advocate of the "do your best" theory of healthcare but, despite my best lifelong effort, I suffer from high blood pressure which is controlled by medication. It happens even when you exercise, eat well, pray, and practice mindful walks in the woods.
Like I said, I think you are right and wrong.
11
Samantha, I agree with G-Unit on your post. I have hypertension for no fault of my own (first detected in my early teen years), and it is controlled by medication. Same for cholesterol- despite very good diet and exercise, I had a heart attack 16 years ago. The stent and the statins keep me alive. I totally believe in lifestyle changes, but they have their limits.
7
If you shift more of the cost to enrollees via higher premiums, you're not really making it more market-based. Patients have no bargaining power against big drug companies that can increase prices to sky high levels.
18
The same is true of most insurance that has deductibles. If the suppliers can increase costs above the deductible, the costs make little difference to the insured so the insured has no incentive to monitor costs. With medical costs in this era of for profit free market medicine the solution is easy. Most drugs are now made overseas and shipped to all areas of the globe. Simply open up our market so it is legal for Americans to but their drugs from India, Mexico, Canada, Europe, Japan, wherever they like and get credit toward their deductible for those expenditures. Why not do it for all medical care??
3
After a recent experience at a local pharmacy, I'm not a fan of anything our politicians do on our behalf.
I went in to pick up a prescribed 5 ounce tube of generic medication and with a straight face, the pharmacist told me it was $1000. I laughed in his face and told him he could keep it. Suddenly, the medication was $1.25 and he couldn't give it to me fast enough.
Taking advantage of and gouging seniors is despicable. Big Pharma needs to be cut down to size and our politicians need to do our bidding. It's what they are elected to do.
26
@Pamela L. You are 100% right! But I did have an opposite experience. When confronted with an expensive prescription, the price of which I had confirmed at other pharmacies, my wonderful pharmacist went to bat for me invoking whatever discounts she could find, and helped me gain an exception to my prescription plan's formulary. This resulted in a 90% decrease in the cost of that prescription. I am so grateful for this person's help, one who is actually interested in healing.
20
Am I the only one struck that the author hasn’t a thought of concern regarding the hardship of the individuals shelling out $5k before they arrive at “catastrophic coverage?” A much lower figure is catastrophic for many of the elderly
34
@ml
Medicaid picks up the $5000 for people who cannot afford it, or the drug companies have charities set up to cover the co-pays. For people who can afford $5,000, they have to pay it.
Retirees who have modest incomes can sign up for a Medicare Advantage plan that includes drug coverage that limits out-of-pocket costs.
What you are missing is the extent to which the Democrats made a gift to the drug companies, in exchange for their support of Obamacare, that lets them game the system to extract federal taxpayer dollars. They boost the price of the drugs, then they cover some of the $5000 out-of-pocket which they got to sooner because of the increased prices, and then the taxpayer covers the rest.
4
@ebmem: I have no doubt that Democrats were forced to "make that gift" by Republicans on the take by drug companies, in order to get any health care improvement through. And why on earth is Medicare prohibited to negotiate drug prices?
1
@ebmem
What you are missing is that people with incomes and assets way above the Medicaid level find it difficult to spend that $5000 a year on drugs and they don't qualify for drug company "charities." I would lay the necessity for this drug company benefit at the feet of the Republicans who were nothing but obstructionist as the Obama administration constructed the Affordable Care Act.
Single-payer healthcare isn't necessary, but single-pricing is.
We obsess over CMS and Government programs when the high-cost is really pushed into Employer Sponsor Insurance (ESI). The average annual cost of PPO for an American Family of 4 is now over $28,000 - and no, that's not a typo.
There's only reason for our system of tiered coverage - to support tiered pricing (as the way to maximize revenue/profits). Universal Health Coverage is the delivery mechanism for single pricing.
http://hc4.us/PriceNotPayer
8
When this benefit was introduced nearly a decade ago, President Bush and his Republican congressional colleagues were nearly giddy in their delight. Finally they could say they one-upped the Democrats on a social program and the elderly would flock to Republican fold.
There was only one problem. The Republicans never funded the program and refused to allow CMS to negotiate prices with Big Pharma. Voila! Here we are today with yet another fiscal mess. If all this sounds familiar to the Republican spending philosophy, that's because it is. The recent huge tax cut is mushrooming the nation's debt and deficits.
Despite all of this spending, Trump still wants billions more for his wall. Please, Congress, don't spend a dime on that boondoggle until Mexico hands us the check for payment. In other words....never. And Mr. Trump, since your are focused on Omarosa, Mueller and the NFL, send a non-GOP negotiating team into deal with Big Pharma or, better yet, let a European team do it. They have better deals than we ever thought possible.
20
@Tom Q
Until the Democrats changed the rules as part of Obamacare, the Medicare part D program was the first welfare program that cost less than the CBO estimates.
Further, at its inception, the federal taxpayer cost was offset by the reduction in per capita costs in Medicare parts A and B because it turns out that if people take their meds, even expensive ones, they have fewer hospitalizations and other complications. Since 50% of Medicare is funded by general federal revenue, Medicare part A B D cost less than Medicare Part A B before the drug plan. The part D program reduced both federal spending and lowered out of pocket drug costs for retirees.
That is what happens when Republicans design social welfare plans.
What the Democrats wanted to do was to have a bureaucrat calculate a "fair" price and tell the drug companies to take it or leave it, which is what Canada and the VA do, which is why not all drugs are available in those plans. To the extent that the bureaucrats reduced the prices of drugs, the drug companies would simply raise their prices to everyone else So Medicare would appear less expansive, but the drug companies would retain their profits, by design.
What Obamacare did was offer drug companies the ability to raise the prices of expensive drugs, which suddenly even included generic drugs, by increasing the ability of the part D insurers to pass off the costs to the federal taxpayer.
Drug prices have inflated at 2.4 times the CPI since Obamacare.
8
This seems like scaremongering.
In 2007, our government spent 2.8 trillion $.
In 2016, that figure was 3.9 trillion $.
That increase is 39%.
Part D increased 72%, as Mr. Frakt states. One should ask, 'So what?'.
A better view would be that in 2007, Part D expenses made up only 1.6% of our Federal spending. That was too low for an essential component of our nation's health care.
The increase in Part D between 2007 and 2016 is simply a needed correction to properly value the national importance of Part D.
6
Those arguing for requiring Medicare to negotiate drug prices (actually, outside of the topic of the article - it is more about how insurance companies shifts costs to the reinsurance fund) should realize that the only way to negotiate effectively is to establish narrow formularies. Those Medicare recipients who want their choices limited in this manner are already subscribing to Medicare advantage plans, and don't participate in Part D. One of the major reasons people are using traditional Medicaid (and pay good amounts extra for Part D and for Medigap coverage) is being able to choose their doctors and to allow their doctors to select the right medicine without insurance company rules (or formularies).
5
To change this situation we need to make sure we vote for candidates that promise, in writing, to change the law. If they don't do as they promised, no exceptions, we vote them out of office. The only reason money affects votes is if voters simply vote for whomever has better name recognition through advertising rather than their platform. Until we do our homework and require candidates to take certain action in order to secure our vote, nothing will change, and the drug companies will win and continue to charge more.
5
Gosh, I thought we wanted Medicare For All. It was going to fix all our problems! Bernie, what happened? (Wait, you didn't lie like that other guy did, did you?)
2
@csx Be careful what you wish for. What I would like is the same national Blue Cross point of service plan that covers active and retired members of Congress and many active and retired federal employees, along with the dental plan that covers those same active and retired individuals.
13
The basic problem here is that the Part D program is designed to keep drug companies and drug insurance companies wealthy.
Its objectives should be to keep the costs to consumers and to t he government as low as possible.
The straigh-forward way to do this is to copy the basic Medicare pattern: A government panel sets prices (negotiates with the drug companies), and the government covers 80% of the cost, and the consumer pays 20% (or buys supplemental insurance to address this expense).
Insurance and drug companies have the lobbying power to feather their nests, and like it when the government bears as much burden as possible so that the public does not marshal a strong resistance.
For all this we have the Supreme Court to thank (Citizens United).
18
@Paul W. Case Sr.
Medicare follows that pattern with hospital and other services. Hospitals and other providers increase prices they charge to everyone else. Why would you believe the drug companies would not do the same thing? Part of the reason why drug prices have accelerated at 2.4 times the CPI since the inception of Obamacare is because of gaming offered as a bribe for their support.
Hillary did not want Citizens United to distribute a documentary about her life, and got the FEC to suppress it. Her argument was that Citizens United was a non-profit corporation and the McCain-Feingold campaign finance reform prohibited non-profit corporations from engaging in political speech.
The SCOTUS ruling was that if Citizens United was not entitled to free speech because citizens had organized as a corporation, then the same rule would have to be applied to moveon.org, Media Matters and hundreds of other left wing organizations, as well as unions. Which seemed to them to be suppression of free speech.
Interestingly enough, the drug companies did, secretly, sponsor advertisements and social media campaigns in support of Obamacare, because they knew their profits would increase. You apparently didn't find it necessary to complain to the FEC even though by Hillary's definition it was a violation of M-F.
M-F and Hillary did not seek to limit the other ways to influence politicians, like giving speaking fees to their husband to the tune of $30 million per year.
2
I get my prescriptions in Canada for 1/4 the price—and they’re still expensive!
4
Wake up. Let medicare negotiate. Failure to do so just means that big pharma sends all of us the bill to pay.
DON'T just comment in this column. DO SOMETHING. FIND OUT exactly how your elected officials are or are not voting and then work to get rid of those who are working against your interests.
9
In response to Concerned MD who writes " the GOP refusal to allow price discount negotiation is a travesty foisted on the taxpayers"
The refusal is bipartisan in Congress. It is NOT just the GOP
From Politico
The one that got away: Obamacare and the drug industry
https://www.politico.com/story/2016/07/obamacare-prescription-drugs-phar...
" the industry moved smartly and swiftly as Obamacare was taking shape. It was first to the negotiating table with Senate Finance Committee Democrats and the White House. The drug companies agreed to pay $90 billion to help fund the law’s insurance expansion — an expansion that would also happen to deliver millions of new, paying customers to the drug companies.
Otherwise, drug companies were left to carry on business as usual.
No reimportation of medicines from countries like Canada, where they’re sold at a fraction of what Americans pay — an idea that has reemerged recently but has not gotten traction.
No government negotiations of drug price — although both Donald Trump and Hillary Clinton have endorsed Medicare negotiations. Congress has repeatedly nixed the idea.
Democrats had majorities in both houses of Congress when the health law deal was cut, but the negotiators caved on their party’s longstanding proposals — seen as a mortal threat by pharma — in exchange for the industry’s buy-in and financial support"
The core problem is that the US political system is corrupt, both parties depending on campaign contributions.
6
@Woof Democrats had majorities when the health care law was cut, but the Part D law was negotiated during the GWB administration when the Republicans were in charge. Most of the negotiating occurred in 2005 and the plan started in 2006. That said, I do agree that the problem is bipartisan.
6
@Mark
Democrats created new gaming opportunities to Medicare part D as part of the Obamacare legislation, which increased the profits of drug companies, intentionally.
Although I agree that the problem is bipartisan, the reason Republicans did not repeal it was the RINO McCain vote, along with the refusal of any Democrat to pull back any profits from big medicine.
Under the Republican design of Medicare part D, along with the other Bush reforms, medical inflation dropped below double digits. [Medicare part D was enacted in 2003 and became effective in 2006.] Drug inflation was reignited after Obamacare was implemented, back to 2.4 times the CPI. The inflation affected the amount of money taxpayers are paying for Medicare and Medicaid and Obamacare subsidies, but has also inflated the medical costs of people who have employer provided health insurance. big medicine got a healthy ROI on their payments for and on behalf of Democrats.
The media coverage of the perils of Republican actions on social welfare programs are the result of propaganda from big medicine.
I recommend that readers read the Kaiser Family Foundation on the subject
https://www.kff.org/medicare/issue-brief/searching-for-savings-in-medica...
Interestingly the KKF states
"that giving the Secretary authority to negotiate lower prices for a broad set of drugs on behalf of Medicare beneficiaries would have “a negligible effect on federal spending.”It based this assessment on its view that the Secretary would not be able to leverage deeper discounts for drugs than risk-bearing private plans, given the incentives built into the structure of the Part D market, where plan sponsors bid to participate in the program, compete for enrollees based on cost and coverage, and bear some risk for costs that exceed their projections.
CBO has suggested that savings could potentially be achieved under a defined set of circumstances. For example, in addition to simply removing the non-interference clause and allowing the Secretary to negotiate drug prices, CBO has said that in order to obtain price discounts, the Secretary would need authority to establish a formulary that included some drugs and excluded others and imposed other utilization management restrictions, in much the same way that private Part D plans do"
The CBO is the non-partisan Congressional Budget office.
For more details see above link
2
@Woof
Although much of what the Kaiser Foundation reports is objective and factual, it is important to recognize the extent to which, on policy recommendations, it is the lobbying arm for its sister organization Kaiser Permanente, which is a complex web of for profit and not-for-profit entities. I've copied your link for future review.
From what you copied here from their recommendations, they are supporting the notion of limiting drug company profits by limiting the formularies to exclude high priced drugs, in response to the fact that drug prices [70% of which are generic drugs] have increased at 2.4 times the CPI since 2013, the year before Obamacare was implemented. I am willing to bet that they do not even mention that hospital charges have increased at 3.3 times the CPI, despite reduced unreimbursed care, and any suggestions for reducing hospital costs will not include a suggestion that Kaiser Permanente reduce their charges.
1
Part D. One of the biggest scams ever perpetrated by GOP.
Every company’s Formulary is different and changes year to year.
Drugs are in different tiers in different formularies.
“Total” cost of each drug varies from company to company.
Each plan will get you to the donut hole at a different rate.
Etc. etc.
There are so many hidden items, one cannot possibly choose the proper drug plan each year without doing the computerized comparisons on the Medicare site.
Even with that, your drug costs cannot be controlled if you need a new drug during the plan year, especially if it is not in the plan formulary.
AND, some of the most common drugs are not in the Formulary and are exhoborantly priced, like hundreds of dollars for certain hydrocortisone formulations or Epi-pens that in reality contain about one dollar of medication
Free market my a.. You have a better chance wit a three-card monte game.
Wake up America. VOTE THE GOP SCOUNDRELS OUT.
VOTE.
25
Medicare can’t negotiate. Drug companies produce drugs to make MONEY; Not to cure or treat people, regardless of what their ads say!
And of course given billions in tax breaks to billionaires and corporations isn’t a problem but drugs for humans is a problem.
9
I have found that the in-plan pharmacies such as CVS or Walgreens provide the prescription at your Part D copay say $3 for a generic, however, they classify the "actual" full drug price at an extremely high price maybe $80. It's the $80 that counts towards reaching catastrophic tiers which as the writer shows is costing the government big money.
BUT to my point: the $80 is the usual funny money.
Before qualifying for Medicare, I used the Costco pharmacy as cash pay meaning no insurance was involved and I assume Costco was not artificially reducing the price of my drugs. What I might have paid Costco $8 as cash pay, Walgreens says is $80. From direct experience (same drug, same dosage) the Part D "full" prices are not real. Actually, I don't understand why Walgreens can "makeup" such a high price for a drug I know is cheap. Isn't that part of the problem?
37
So long as big pharma has such influence in Washington, nothing will get better. It is outrageous that Medicare cannot negotiate drug prices. There should be a law passed through Congress that prices for specific drugs cannot exceed the average price paid for the same drug in the EU. Whatever they are willing to sell it for in other, prosperous First World Countries is what we should also pay.
In the present US Senate election, the Republican candidate is a former pharma CEO. The Menendez campaign is making an issue of the fact that, while he was CEO, his company raised the prices on a cancer drug. This is a false issue. The CEO was responding to a system that empowered the industry to do just that. Congress made the laws that define the system. Bob Menendez is now running for his third term. The better issue is, why did Menendez do nothing to change the system that allows such price increases by big pharma? If Congress tolerates a system that allows such price increases, I blame Congress, and those in it, before I blame executives who are playing within the rules made for them.
10
In addition to the factors cited by the author, one MUST also cite the practice of "rebates" kicked back to pharmacy benefit managers, State Medicaid Programs, and State administered AIDS Drug Assistance Programs.
These rebates are by contract shielded from public scrutiny. They dramatically boost the reported "list" price triggering a greater Part D expenditure, at the same time padding the profits of P.B.M's and drug companies.
Between the webs of patents and secret rebate programs, the American people are being ripped off. Enacting Medicare for All without addressing this issue is a fiscal disaster waiting to happen.
16
There is a reason Medicare Part D passed Congress with almost no Democratic votes.
It was designed by Republicans for the benefit of big Pharma.
For example, a person who is a "dual enrollee" , that is, qualifies for Medicare and Medicaid, was required by GOP law to get his drugs from Medicare. This added EIGHT BILLION to the cost of PartD for the EXACT same drugs since Medicare could not negotiate drug prices.
6
This conveniently leaves out that Medicare can not negotiate drug prices thanks to heavy lobbying by the pharm companies and capitulation by their paid MOC’s and Senators. Making it entirely public would remove those handcuffs plus take the insurance company profit margins out of the cost column. As the largest purchaser of medications, Medicare could negotiate prices that would trim pharm profit margins to a reasonable level - one that does not support massive stock buybacks for enriching their CEO’s.
5
I myself am shocked that nobody foresaw these sorts of costs.
Oh, wait—somebody did:
"Initially, the net cost of the program was projected at $400 billion for the ten-year period between 2004 and 2013. Administration official Thomas Scully instructed analyst Richard Foster not to tell Congress of Foster's finding that the cost would actually be over $500 billion. One month after passage, the administration estimated that the net cost of the program over the period between 2006 (the first year the program started paying benefits) and 2015 would be $534 billion."
https://en.wikipedia.org/wiki/Medicare_Prescription_Drug,_Improvement,_a...
2
Part D remains a convoluted, complex system with prolific bait and switch tactics guaranteed to confuse the customers. One year the same company will cover drug X and the next not cover it at all or, more likely, they will jump tiers and charge more than other options, like Canada. We have resigned ourselves to believe that the only reason we keeping paying the premium is for catastrophic coverage in an emergency. Even that is probably in peril. Most of the newer meds are placed on QL, pre-authorization, highest tiers or not covered at all. I'll wager it would be less expensive to run this without the insurance companies and all their expenses that add no value. It's truly a game to them.
20
@Taoshum I agree. I often think it might be better to just opt out of Part D. use free discount plans like Blink Health and Good Rx and cross my fingers.
2
Is it any wonder Chris Collins invested in a pharmaceutical company?
7
@bnc
Republican point man on Medicare D when it was being written, Billy Tauzin of LA, immediately left Congress to be top lobbyist for Big Pharma.
3
You fail to mention the drugs that are "ëxcluded" under Part D. I have been unable to get drugs which are deemed "medically necessary" but "not in the formulary."
11
@dr. c.c. Well if they are medically necessary then you have to go get them somewhere else where you can get a decent price. Check the price lists at discounters like Good Rx & Blink Health, check Walmart, check Canada, and finally see if the manufacturer has any kind of discount program.
All insurers have drugs that aren't in their formulary. During open enrollment this fall you could check fo see what other plans cover this drug and at what level.
4
Am an ex pat who will be returning to the US. Always kept part A and B even when out of the country so I wouldn't faced a hefty increase when returning. Now comes the part I don't understand of including part D. Using the Insurance companies website , those you have a choice in any given state, is confusing Part D donut hole and all is quite clear, what isn't is as in my case two new drugs I now need are so called blockbuster and retail for over 100,000.00 a year. Seems to me when you choose your carrier they include a hefty premium to cover their portion after the donut hole. Do I have this right?
1
I think that Medicare Part D is a good example of Republicans tying themselves into knots in order to preserve their ideological preconceptions about markets and cost efficiency. How many health policy economists did they get to weigh in on open hearings on this bill?
Surprisingly I don't fault the drug companies for doing whatever they can to make a profit. It's pointless to be mad at your dog because it doesn't act like a cat. I fault the lawmakers for building a framework that encourages gaming the system at the expense of the taxpayer.
16
Republicans have wanted to bankrupt both Medicare and Social Security since their inceptions. This is accomplished normally by cutting funding; the less obvious method is to prevent cost control. They gladly approved the tax cuts, moving funds from both programs to the deficit. Now, they'll claim we need massive expense cuts in both programs. For years, they've used surplus funds from both programs to reduce the "consolidated revenue deficit", ironically the invention of LBJ to fake the real costs of the Vietnam war, robbing from both programs rather than asking Congress fr higher appropriations to pay for the war. Now, we're pushing the limits on both programs as more of us retire and our lifespans grow longer. The payroll tax "slush funds" are not there anymore.
17
@bnc
yes, exactly.
Republicans gave Medicare Advantage plans a "temporary" subsidy, thus draining funds from the less expensive Medicare
Republicans created part D without a source of funding and with a rule that Medicare could not negotiate prices (then the sleaze Republican who wrote the legislation was rewarded with a highly compensated job at the Pharma lobbying group).
The goal of the Republicans, in addition to running up the deficit to squeeze spending that is devoted to serving Americans (rather than just wealthy Republican donors) is to destroy Medicare (and Social Security--they opposed both programs from the start and have been trying to undermine them ever since)
12
Additionally, the Congress allowed Obama to grant a "tax holiday" for the payroll deductions that fund Social Security and Medicare as part of his economic recovery program for the recession bequeathed to him by the former "I leave that problem to my successor" president, George W. Bush.
1
@Lynn And yet they and many of their family members are willing to draw SS and Medicaid.
There should be no reinsurance whatsoever! Reinsurance is a euphemism for bailout. This happens whenever any public insurance is privatized, such as the recent privatization debacle of Medicaid in Iowa. In a "public-private partnership," the public (government) always takes most of the risk and and the private companies take most of the profit, as everyone knows.
6
Forgive me if I’m wrong, but I understand that unlike TriCare and the Pentagon, Medicare is specifically forbidden to negotiate drug prices with suppliers and manufacturers (we could guess why!). If some branches of government can in fact negotiate prices down, could those branches sell on drugs at no markup to the Medicare system? The least that would happen is that GOP sponsors of the “no negotiating” legislation would have to step into the daylight to explain their opposition to less expensive medications for Medicare recipients. The Navy, Army, AirForce and Coastguard can negotiate drug prices, but Medicare can’t?
7
Part D was a gift that keeps on giving to the pharmaceutical industry from W's administration, aided and abetted by AARP.
Coincidentally (?), both Part D and W's wars were not funded, nor was funding asked for...
16
Big Pharma has the inherent tendency to invent new needs, disregard all boundaries and turn Medicare Part D into an object for sale and big profit. To fix this problem, we might nationalize the pharmaceutical industry and mandate that drug companies be converted to non-profit public service corporations that serve the public interest rather than being used by 1% investors for unlimited profit.
Another option is to establish a "Medicare for All" system of health insurance that allows a single purchaser — the government — to directly haggle with drug manufacturers over drug prices. This would bring U.S. drug prices in line with those of other high-income countries, which pay substantially less than we do for medications.
Additionally, we need comprehensive reform in the way we produce new drugs — inclusive of a public path for drug development and clinical trials that would produce new medications that remain forever in the public domain. Drugs would then function as real social service/health goods, not profit-producing commodities.
10
@F.Douglas Stephenson, LCSW, BCD Do you really trust the government to negotiate with pharma to the benefit of the taxpayer? Dream on!
2
I suspect that a careful study would show that Medicare Part D has led to worse health among seniors. Too many are taking too many drugs. The effect of drug combinations is not well studied. Doctors are swamped by sales efforts of drug companies and patients have trained them (or they have trained patients) to expect a new prescription as the solution for every ailment of old age.
If patients had to pay for their drugs, they wouldn't be so eager to get expensive prescriptions and their health might improve if they could avoid all those side effects.
Of course, some drugs are necessary and very effective. But the patient should be willing to pay their cost if they are so effective.
There is Medicaid for those senior who are too poor to pay for drugs. It's really a matter of choices. Seniors would naturally like other people to pay for their drugs so they have money to spend elsewhere. But it is really bad policy. to encourage more drug spending.
The ultimate solution to the problem of the naturally declining health of seniors is death Harsh as that sounds, that is what nature intends.
Public health care dollars would be much better spent on the young and pregnant women.
1
@Mac
So, in other words, the wealthy would be able to live into old age, but the middle class/poor....not so much.
Wow.
8
Tell that to your own mother or grandmother.
1
Please clearly state whether or not the dollar comparisons are in 2007 dollars . This makes a substantial difference in terms of the “higher cost” .
The lack of ability negotiate for Part D medications discussed often in these remarks is only one part of the folly of national drup policy. We subsidize pharma with the ridiculously long period they are granted monopolies through patents. Many, nay perhaps most, of these breakthrough medications are funded in part by federal dollars, usually through NIH. Yet the pharma companies get long patent protection, which outrageously they can renew (!), to maintain monopolistic high prices and eliminate competition. The patent rules for pharma need a complete overhaul. They way we have it now, the costs of new medications are bourne almost entirely by the critically ill, blasting through insurance and forcing horrible decisions about bankruptcy or death. Pharma can price meds however they want, as recent scandals have painfully shown. Patents, if they are granted at all for public-private development, should be short and non-renewable. Public investment in drug research should come back to the public. The high cost of new drugs should be bourne by society, not the terminally and critically ill.
8
I use express scripts. Most drugs I take are generics. So far thru June 2018 Medicare part D paid $448.80, deductible $350, my portion of drug costs $667.40 for a total of $1,466.20 while E/S scripts paid out $317.87. Generic metoprolol e/s pd $68.68 and I paid $60. I now take a high priced 2 meds that will put me in donut hole. On ernestro they made a 50/50 split $206.38 for 30 day supply. So I think Express Scripts will make a great profit off of me.
5
George W Bush's "donut hole" is terrible. FWIW, many/most pharmaceutical companies offer an assistance program for low-income patients, including those on Medicare. It's a royal pain--each company has different eligibility requirements and a different application, and you'll need your doc to fill out part of the paperwork and fax over a new paper script. But...just an FYI that $ help is available, if you're able to deal with a bunch of paperwork. Google each drug to find out more or you can step through the medicare website.
https://www.medicare.gov/pharmaceutical-assistance-program/Index.aspx
4
This is why I am signing up for Kaiser Senior Advantage when I hit 65. Meds are included and there is no need to sign up for Part D. I suspect Kaiser (with such a huge patient cohort) negotiates drug prices down to a more reasonable level.
8
I always wonder if I'm living in another universe when I read these stories on Part D.
I have been in Medicare Part D for 6 years and am on my 3rd plan. When the premiums and or copays go up, or my needs change, I usually switch to a different plan. However, I have found in some cases I do better by ignoring my Part D plan and going with Blink Health,a discounter I signed up with a few years ago. People who don't want to pay for Part D and are reasonably healthy should consider doing that or just going to a place like GoodRx or Walmart. Unless you have enormous Rx needs due to very serious/chronic illness.
I have found the same to be true of Medicare Supplements. I have one,High Deductible Plan F (which AARP & its partner United Healthcare refuse to offer) that costs about $70 a month and kicks in only when my Medicare A/B out of pocket totals about $2300 (only 1 year in my 6 years of participation & that was because of accident that required hospitalization). Usually my out of pocket is no more than$400/ $500 or so, and that is about the amount of benefit reasonably healthy people like me who are instead paying $3000-$4000 a year in Medicare supplement premiums are getting. Pay $3k or $4k a year in premiums for $500 in benefits? It's racket, in part promoted by AARP.
3
Just got a letter that the premium for AARP Medicare supplement plan is going up again next year, another 5%. AARP RX premium plan is already $90 a month with co-pays.
1
@Lisa My Medicare supplement premium has gone down in the 6 years I have had it -- from $77 a month to $70, I assume because NY state insurance regulators require all health insurers to prove that claims justify the premiums. I think this is really interesting especially since my insurer (Blue Cross) stopped selling ALL Medicare supplements in NY state 5 yrs ago to instead focus on Advantage plans, in which there is much much more profit. Although state law requires they keep people already insured, they aren't selling new policies, which means the population they DO cover is fixed and getting older. Nonetheless, this group wasn't filing enough claims to justify the premiums BC was charging, at least according to state regulators. A lot depends on where you live. Some states regulate more than others, and in some states premiums are age related (like CA) while in others they are community based (like NY, where a 65 year old has same premium as 85 year old).
There is a huge range in Pard D premiums. I have always gotten one of the cheapest ones -- currently pay $17 a month for an Aetna plan -- previously had under $20 a month plans w/Humana and, I think, AARP. I am not, thankfully, taking any expensive drugs and am pretty healthy from that perspective, so don't want to spend more than I have to. I have also bought drugs through the free discounter Blink Health, which sometimes costs less than thru my Part D plan.
@ellienyc
You've used the term "reasonably healthy" several times. It seems that it hasn't occurred to you that health people become ill. Hence, the concept of "insurance."
My father was 21 years old when he started purchasing life insurance. He was in excellent health, but had just become a father. He purchased additional life insurance each time a child was born, and continued to buy life insurance. for his wife and five children, as the years went by. When he become a grandfather, at age 48, he sat down his 26 year old son-in-law and gave him a lecture regarding the importance of purchasing life insurance to protect his newborn daughter.
At 51 & 2 weeks, he drove to his office in the City, worked for an hour, then dropped dead, suddenly.
He was "reasonably healthy" right up until the moment he was dead. He left behind a 49 year old widow and five children. While the shock and loss of my father was devastating to his widow and children, it was not devastating financially, because he had planned for a worst case scenario . He didn't rely on being perfectly healthy ,even when he was 21. He understood the purpose of insurance.
If you think that purchasing supplemental insurance is a "racket", then you are free to stop paying it. I wouldn't take that gamble.I learned the value of insurance when as a 21 year old whose father went to work and dropped dread by 9:30 a.m.
2
This is just another case of industry (pharma and insurance) in a win-win situation. Government and consumers in a lose-lose situation. One huge fallacy - Republicans will run government like a business. It's not like the Democrats are putting up a fight, but if government is run like a business, we'll have the option to get medicare for all, AND we'll have government negotiate prices with the interests of consumers and taxpayers in mind. Let me repeat. Government will negotiate prices! Because government should be run like a business.
8
i have medicare advatage. part d drug included. my premium up almost a THIRD in last 2 years... co-pays doubling etc. 4 years ago, no co-pay for specialists, now $35.one med went from $8 co-pay to $120 CO -PAY, thank you miserable Amneal Pharm of New Jersey. grateful to have it but the monthly costs now hardship. if i become ill, it is all over. lack of dental coverage IS a hardship, IS life-altering, even life-threatening.
6
@cass county I have a Medicare supplement -- HIgh Deductible Plan F -- and in the 6 years I have participated my premiums have gone down, as required by NY state dept of insurance when claims do not justify premiums charged.
I also have a separate Part D Rx plan, which I change every year or two. I currently have a plan that costs $17 a month and under which the drug I take regularly costs $0 and a couple others I take less regularly cost $3 - $7 at a pharmacy for a fill that usually lasts 3 months or so.
You should keep in mind that under original Medicare Part B your coinsurance for a specialist visit isn't likely to be very much, even without a Medicare Supplement. I usually get bills for $15, $17, $28 for my share of a specialist visit when I haven't yet met the deductible for my Medicare supplement plan.
On drugs, you should consider signing up with Good Rx, Blink Health and any other drug discounters in your area, as they frequently are less expensive than under your drug plan, plus often have signup bonuses that make at least one month's Rx free.
3
This ignores the elephant in the room--marketing costs. Alan Sager of BU has found that the marketing costs of Big Pharma eat up about a third of their budget and are about 3 times what they spend on R &D.
So what are these costs? Well, first of all, there are the irritating ads that saturate the air waves and the print media. The first one was on May 19, 1983. The only other country that allows prescription drug ads is New Zealand. A simple act of Congress or a regulation by the FDA could eliminate them.
Then there are the pushers that infest doctors' offices. These are totally unqualified salesmen whose main purpose seems to be to get doctors to use drugs in unapproved procedures.
Finally, of course, there are the payments to physician, both under and over the table. These range from free lunches, to paid vacations at expensive resorts under the cover of a lecture or two so they can call it a conference, to huge contracts as consultants.
The purpose of the ads is to get us to ask for drugs our doctors do not think we need while the pushers and the payments are to get physicians to prescribe new expensive drugs even when older cheaper drugs do as well if not better.
It has been conservatively estimated that if this marketing is eliminated, it would lower the cost of health care by $100 Billion each and every year.
http://www.theatlantic.com/doc/200604/drug-reps.
http://www.nytimes.com/2007/11/25/magazine/25memoir-t.html
33
@Len Charlap Thanks! Add to the fact that the enrollment has doubled in ten years, and it's like a feeding frenzy for this unnecessary aspect of medicine. Your solution, "A simple act of Congress or a regulation by the FDA could eliminate them" should be relatively easy and cheap to accomplish, makes sense and could even be a political platform for success.
9
At the point that Medicare stops paying for medications, called the "coverage gap" (usually around June) until the "catastrophic" part kicks in, retirees are required to pay astounding amounts of money for some medications. I am doing without an important medication because I refuse to pay nearly $1,000 for a three month refill.
Certainly seniors would do better knowing their medications would be covered at the same rate all year. I can't help thinking this would be cheaper for the government, but I know it would improve the quality of life for retirees. What kind of crazy system is this?
17
@Erik Skamser
I'm on the flip side of that coin, but I feel your pain!
I have regular old-fashioned Medicare A+B and signed up for a premium supplemental plan. I plan to travel outside the country and wanted to make sure I had full health insurance coverage... that's the upside.
The downside is that my drug coverage costs me $100 per month in this policy. Why is that a downside? I've been rather fortunate and, currently, only take one medication. That prescription would cost me $20, out-of-pocket, every 3 months.
So, yeah, I'm paying the insurance company $1,200 per year for a prescription that would costs me $80 per year in cold hard cash.
6
@Donna Nieckula
It sounds like a bad deal for you, but insurance is supposed to spread risk. Some people pay more for a level of services they don't use so they can be covered in case they get sick. Think of it like car or homeowners insurance. You pay the premiums, yet are glad not to have to put in a claim.
@PWR Your simple point that insurance is a device to spread the risk is overlooked time and time again. The latest bit of nonsense are these low coverage association plans, touted by Trump, that are not required to meet the plan requirements of the AC . The inevitable consequence is that healthier people will go for these plans and their lower premiums which takes dollars out of the risk pool the rest of us are sharing. But since these plans are not very good at meeting catastrophic or long term medical needs, the rest of us still end up paying when the policy or the policy holders can't.
There is no escaping the math. The cheapest insurance that provides adequate medical care is a single plan with everyone in it and with one payer to minimize marketing and administrative costs.
We should all be outraged at a congress that continually funnels our health care dollars to anything that doesn't improve our healthcare and throw the bums out; one day we will.
1
Written into the legislation for Medicare part D was that the government cannot bargain for lower prices with the drug companies. What kind of idiots would vote for a law like that? Those who have received favors from the drug companies. It is time that the congresspeople actually work for us, the taxpayers, instead of taking bribes.
40
@Peter. You speak about the rest of the civilised world. I am sorry, but you are not part of it. Health care in your country seems to be a sort of mafioso thing. Maybe it is worse, it is within the law that these 'entrepreneurs' do their foul work.....
25
@Hans van den Berg
That's because Congress is bought and paid for by the pharmaceutical companies and other big businesses.
12
Give a trillion-dollar Tax Relief to the billionaires...AND THE start whining about the cost of the older citizens who gave their all to the country...they don't even have estates after Medicare gets them to "spend down until broke"....AND STILL the whiners crowd around "tsk-tsking" these wasteful spendthrift oldsters...."What did they ever do for America"?
14
@EdwardKJellytoes
There's no spend down requirement for Medicare. Medicare entitlement is established through a minimum of 10 years of payroll tax deductions and by paying a small monthly premium. Medicaid, a joint state-federal program, provides health care coverage for the medically indigent. Spending down personal resources may be necessary to meet the indigency threshold.
5
The statutory prohibition against negotiation of drug prices in an open market is the real culprit that steals from the taxpayers,not reissurance.
The author erroneously argues that "bringing Medicare Part D back" to its original injustice would be fine.
7
Although a Medicare drug benefit was sorely needed, Part D was ill conceived from the beginning. As with all things in health care, the insurance companies find a way to win which leaves the patient and the taxpayer with the consequences. The colossal stupidity of the US in terms of how it permits the health care to be delivered and financed on behalf of everyone except the public never fails to amaze me. Until there is broad scale recognition that we could save a ton of money and achieve better outcomes by revamping the whole system, this kind of story will repeat itself.
12
We've been through this before.
If you have a free-market health care system, where you control costs by "incentives," you must have catastropic coverage when the co-payments become so expensive that the patient can't pay them any more. (For example, there are new drugs that effectively stop the progression of arthritis, psoriasis, and other autoimmune diseases -- at $3,000 a month.) But once you reach the catastrophic stage, you no longer have cost control.
That's what happened in Switzerland. In JAMA, in an exchange titled, "Holes in the Swiss health care system," https://www.ncbi.nlm.nih.gov/pubmed/15353534 Swiss doctors explained that they have a free market with copayments up to a catastrophic level. Once they reach the catastrophic level, services are unlimited -- CAT scans, specialist consultations, anything.
Kenneth Arrow, the Nobel economist, wrote in 1956 (?) that a free market in health care is impossible, because "consumers" don't have enough information. Frakt is trying to prove Arrow wrong.
For every solution Frakt offers, there's a good reason why it can't work. I'm betting on Arrow.
1
Follow the money. It's a gift to Big Pharma from the Bush administration, a gift that is more valuable every year.
12
Whose premiums aren't rising? Mine started at $30/month with minimal co-pays. Now it's over $90/month and MedicareRX doesn't cover many types of drugs. I take only generic drugs, but the list prices have tripled. Who's winning? Not Medicare beneficiaries. Drug and insurance companies are scalping us big time. The only reason I don't opt out is the risk of a major disease like cancer with unbelievably outrageous prices. Trump is going to fix it, right?
7
Has anyone noticed that nearly every other federal program simply exists as a reflection of the intentions of the American people and is not criticized because there are not specifically earmarked taxes or fees to precisely balance the expenditures?
For example, the Defense Dept. levies no taxes or fees. All of its costs, which generally rise over time, are paid for out of the federal budget (hopefully)as a function the will of the people. The budget itself need not be balanced, as can be observed easily. In fact you would be hard pressed to name even one country in the world whose federal budget is balanced, even over time, even over decades of time. The only countries in trouble with unbalanced budgets are those where they borrow foreign currency.
This country can afford to provide medicine for its elderly population. We do not need to levy fees in the amount of our expenses for doing so if we choose not to.
“You wouldn’t see this kind of thing in the commercial market.” Right, and that perfectly illustrates the advantage currency issuing governments have when providing for the general welfare.
10
Why do we take so many drugs in the first place? Especially the lifestyle drugs. For most of them don't make us healthier, all they do is manage symptoms of an unhealthy condition. They don't help every person who takes them; it's only a few percent of patients who benefit. And they all have adverse side effects -- for which there are more drugs to treat those!
"A prescription is a permission slip to continue an unhealthy lifestyle." Which is why they are called "lifestyle drugs." I'd rather try to live a healthy lifestyle. Drugs should be a last resort, not the first.
8
@Dr. J Yes, those old folks who need diabetes or high blood pressure medication should have taken better care of themselves. And the people on chemotherapy should have done something to prevent their cancer. And people who spent their lives doing manual labor who are in chronic pain should have gon to college. I presume you are an optometrist, Dr. J? Your hindsight is 20/20.
20
@Dr. J. Saying "a prescription is a permission slip for an unhealthy lifestyle" has absolutely no logic at all.
15
@Kathleen Warnock
Besides which, healthy living habits are no guarantee of good health. Except for a few who may die suddenly, we all get sick or injured, especially as we age.
Medicare D was designed for and by Big Pharma. The goal was profit for them. The lead Republican became a lobbyist for them shortly thereafter. If you haven't yet seen "Big Pharma, Market Failure", an excellent documentary from Richard Master, a business owner in PA, I recommend it. It makes everything clear. It's online.
20
First, I appreciate how the Upshot takes on issues, breaking them down to components to make them more comprehensible.
This Part D anomaly was news to me. Yet it isn't a surprise that there is a failure of oversight by Congress. Philosophically, the GOP has been completely bull headed in it's approach to destroy Obamacare, period. There's been no
political" room for discussion of the realities of care - just shots over - and at - the bow. Few facts. many opinions
The ACA in my opinion lost control of the ball in accepting as integral the role of private insurers -- but the ACA would not have been passed other than in that form.
How can political "leaders" be pushed to deal with facts? How can the public be educated so that voters pressure pols to do what is better for the majority over time? How d we ever get beyond small short term gains which cannot be sustained over time?
How do we get to bipartisan solutions, that will outlive an election cycle?
{In addition, how can lobby money be banned, to eliminate the influence of those who stand to profit from decisions made? It's a core issue in multiple problems)
Without agreed common ground where 1) medical care is seen as a necessity, and 2) where real costs and alternate options can be assessed, - - Medicare can be destroyed. There are many in Congress who will be happy about it. One's access to care will rest on the ability to pay. A majority of us will not be able to do that.
2
Where do we get the idea that premiums have not risen? Mine has gone from about $26 to $72 month with an AARP plan through United Health.
6
@PSR After seeing my AARP/UnitedHealth premiums go up several years in a row, I switched to another plan with so much lower premiums that even with higher costs for my regular prescriptions, I still save about $600/year. This article explains how my new Part D insurer may be able to afford that, as they push me into the "donut hole" (coverage gap) faster than AARP (and I still save that ~$600). That means that if I end up needing one or two more even moderately expensive prescriptions during the year I would go into the "catastrophic range" and my costs would be shifted to government reinsurance. Does not yet happen to me, but it probably does happen for a lot of their enrollees. Crafty of them.
3
Let's remember that Medicare drug payments are also controlled by the so-called "reform" law passed in 2004 in a very contentious voting process by Republicans in Congress. The "reform" quite literally precluded Medicare, in so many words, from negotiating drug prices. Any other large insured group in this country, the VA for example, is free to negotiate prices but Medicare is required to pay whatever the drug companies want to charge. The rapid and ridiculous price increases in prescription drugs can be tied directly to the passing of that law.
It was Republican's attempt to bankrupt Medicare, a technique they also used on the Post Office.
25
Reading all of the comments, it would seem that everyone keeps harping the same thing - that we need a Single Payer health care system with the ability to negotiate drug prices. Nothing new.
I would only add that furthermore to the above, we need to bring to light the wildly inflated costs. (and in many cases uneven between hospitals and the like) People need to know what those costs are, regardless if someone else (insurance) is paying for them.
Then we can get a handle on the costs of the entire system (further bringing down costs) as people and insurance companies alike demand that they no longer are gouged.
It has been the wild west for decades now.
7
@FunkyIrishman
I would be curious to see how "negotiation" over drug prices would play out if there is only a single buyer for the drugs. Would the drug companies have any negotiating leverage other than the threat of stopping production and withholding drugs from the market? Would drug companies become less innovative if their expense structures were subject to regulatory oversight like utilities?
@FunkyIrishman
Single payer. Yes.
All you'll need is at least $13 trillion in new taxes over the next decade and a couple of little things, like compelling doctors to work for about half their current salaries.
Piece of cake.
I have Prescriptiin drug coverage via Kauser Medicare Advantage. Kaiser manages costs, using generics when available. It's managed care and am very happy with it. In the 80s Kaiser was not the Kaiser HealthPlan it is today. I have to use Kaiser which is fine. They are very efficient. Doctor's get vacations without worrying about who will cover for themm. They have benefits, retirement, 401k. They don't have to worry about running a business. It seems that everyone is looking for a career at Kaiser. I give credit to tge ACA here in California due to increase in membership. Kaiser Health is a non-profit.
1
@Corinne Kaiser offers the best health care possible and the most efficient delivery system for prescription drugs. They don’t have hospitals owned by hedge funds nor shareholders to appease quarterly. Kaiser is a much mire attractive platform on which to build towards single payer than the ACA ever was, indeed it was obvious from the beginning with the ludicrous option of paying such a low premium or not and paying a token penalty that the ACA was designed to fail, understandably so in as much as it was written by and for the insurance and drug companies. You’re right Corrine Doctors interested in medicine will gravitate towards Kaiser and no longer to private practice which is largely dominated by Wall Street entities exactly as the Drug Industry is. Perusing the annals of financial publications routinely disclosed the highest paid executives following finance come from the “health care field”, including drug companies and insurance executives.
4
@Corinne
Young doctors want to work for Kaiser because they want an income without the risk of private practice, not because they believe their delivery method is superior. They are equally desirous of jobs with large health care systems (hospitals) that are fee for service.
Kaiser is efficient but they deny needed care when it is elective. I had patients who enrolled in Kaiser for 3 years at a time, and in between joined PPOs for a year to get needed procedures done after Kaiser refused. I had a patient who had a retinal detachment but Kaiser said he was fine- he sought care on his own and paid thousands of dollars to fix his detachment. Kaiser looks like it's cost effective because it pushes costs to other health systems.
4
These chemicals are not that difficult to make in a laboratory. It’s no secret how much prices are gouged at any and every turn.
1
I am a little confused. If the number of enrollees has doubled in the past decade but the government cost burden has gone up only 72%, what is the problem?
2
Medicare for all then allow Medicare to negotiate with drug companies for better prices. The drug companies may bulk at first but sooner or later one will blink when they think that can grab a large or even majority share of the medicare market.
2
It is shocking to me that the feds do not regulate insurance companies at all including reinsurance companies because of the McCarran-Ferguson Act of 1948. Much change since 1948!
The District of Colorado 02-cv-1950 document 465 is a verified collection of attorney bills submitted by Hall and Evans, a law firm based in Denver that is part of an international "consortium". One is to Lloyds of London and includes a policy number and the name of the purchaser, a prosecutor in Colorado. Lloyds is not authorized to sell insurance to Colorado consumers. Yet, when I brought this to the attention of the Colorado Department of Insurance, they not only did nothing, they arranged that one person, Todd Larson in Licensing, would be referred all complaints about Lloyds and all communications from me.
Here's an advertisement from Lloyds /Beazley
https://www.beazley.com/london_market/specialty_lines/professional_liabi... saying: "Our US clients are served by both our Lloyd's and US-based underwriters, including our private enterprise team that focuses on the insurance needs of smaller scale clients."
I also have a stack of bills from Mutual Insurance. Their only office is in Hamilton Bermuda. Their ad:
http://www.mutualinsurance.bm/Page/Home "Today, Mutual is one of the largest libel and media liability insurance providers in North America."
NYT's published an article in 2012 saying
"The hedge fund industry has been rushing headlong to open Bermuda-based reinsurers."
2
@Kay
Good remark, k. Only a few people know about the mccarran-ferguson ACT! It allows insurance companies to price fix or anything else they want in individual states and get away with it. They have their hands in everything and are allowed
to cheat and steal with umpunity. The laughable flood program gives agents 40% of the premium, BTW. They are exempt from anti-trust laws, and they have one of the biggest spending lobbying groups. Why, do you think? We need to cut them out of health care like the cancer they are with a single payer system.
2
Ironically the same seniors benefiting from government-subsidized healthcare are the largest voting bloc in opposition to universal healthcare for everyone else. Not incorporating Medicare into the ACA legislation was huge political misstep by the Democrats. Being able to control & negotiate prescription drug prices across the board, would have created huge advantages for the entire system.
4
@NolaDarling it was hard enough passing the ACA let alone changing plans for the seniors. I think these tge thinking was one step at a time. I don't know why those on Medicare would have been opposed however. Most of the insurance carriers except United HealthCare , would’ve been the same. There was so much fake news about the ACA from Tea Party that wiould’ve created utter confusion to add Medicare to the mix..
To all the people blaming this on the Republicans, Trump did support a bill to enable lower drug prices (buying through Canada). Melendez and Booker would not support.
6
@Juanita K.
Politifact called the statement you just made about Melendez and Booker "Mostly False." Read about it here:
https://www.politifact.com/truth-o-meter/statements/2017/jan/18/other-98...
Among other things, there was another amendment being considered at the same time, which they DID vote for. Etc., etc.
1
Juanita K. : Yes Trump did and let’s not forget it was Democrat turned Independent Joe Lieberman who killed the opportunity for single payer to appease his insurance heavy constituents in his home state. To turn this into a partisan issue is disingenuous, there has never been a real push for single payer, there are just too many people making too much money who have too much power to allow it to happen. Ditto the continual escalation of drug prices. Until money is taken out of elections the drug companies will make the profits that they have paid for.
2
@Ted
Agreed.
Too many people making too much money, along with too much regional /state protectionism have severely limited even consideration of a single payer type option. Getting the big money out of elections is important to thins and really, all, decisions affecting the country.
There are so many issues that cause healthcare costs to be unnecessarily high in this country I can't even list them in one post...but I'll try.
1. Medicare unable to negotiate drug prices
2. A plaintiff-friendly medical-legal system leading to "defensive medicine"
3. 1/3 of all of our healthcare spending is for people in their last 6 months of life, when it is most futile. Cultural, political, and legal norms and laws prevent "rationing" of care. In every other first world healthcare system the government or whoever the payer is can refuse to pay for treatment considered unnecessary or not fiscally responsible. Examples would be "heroic treatments" such as expensive chemo drugs, dialysis, intubation or surgery for the very sick or elderly where lifespan may be increased for weeks to months at the cost of hundreds of thousands of dollars.
4. Private insurance: costs 30% more than public insurance
5. A generally unhealthy population
6. Numerous for-profit "middlemen" adding costs to drug and equipment prices
7. Industry friendly patent laws for devices and drugs unmatched anywhere else in the world
8. A byzantine payment/insurance system making tracking costs nearly impossible
9. A culture where everyone believes they deserve the best treatment regardless of the cost
10. Money, profit, corruption........repeat
31
@Zack MD
Add a #11. FRAUD, which is rampant.
Isn't it time to get insurance companies, and all their subterfuge, out of health care business?
24
@J K Griffin YES.
When looking at cost control, I'd go to root causes. I'd go past the system to the pharmaceutical vendors, who charge outrageously more in the USA than they do in other countries. Why? Because they can.
14
As I commented on the last story in this series on health care costs, as long as the structure remains an exercise in profit-making, in this instance big pharma, costs will rise. Any notion that “market forces” or “competition” will limit costs is fantasy. It’s handing control over to big business and we’re dancing around the real problem with US health care—unregulated business.
21
Other countries have formularies of medications that are covered by their universal health care schemes. Prices of what will be included are negotiated. Consequently they pay much less for the same products from the same supplying companies. There is no rational reason why we should not do the same. False arguments are presented as to why, but they are false -- fantasies touted by lobbyists.
9
@Penseur Venezuela! Socialism! Illegals! (At least that's what i've been able to glean from the folks who oppose Medicare for all.)
2
I'm a physician in my early 30's with a Masters in health policy. I have very little faith that my generation will receive health benefits anything close to resembling what we have today: it's not sustainable. Everybody knows this but pretends like it doesn't exist. When was the last time you heard a politician, on either side, propose spending less on Medicare? Democrats are so focused on expanding coverage and benefits but nobody focuses on long-term sustainability or efficiency. Republicans talk about removing benefits, not increasing the efficiency of the system. No one in my generation is thinking that far ahead yet, and those receiving or about to receive benefits are happy to mortgage the future for their comfort.
Healthcare costs will be ~20% of GDP by 2026, up from 17.5 last year, and will keep rising, crowding out all other spending. The various medical lobbies quash any attempt to reign in spending. They own congress. The only way this will be solved is if a popular movement demands cheaper healthcare. For those my age that means thinking ahead, and for those receiving benefits it means thinking of your children and grandchildren.
28
@Zack unless you take big business out of healthcare, including big Pharma, insurance companies, and the crazy amount of fraud, among even our Doctors today, it will remain expensive and until there is a system that funds healthcare it will not work. In Europe healthcare at one time was I believe funded through a very large gasoline tax, like several dollars per gallon, , that would be a great place to start, especially in places like Oregon when during the summer all the “back to nature types” are dragging around a housetrailer, recreational vehicle, boat or horse trailer with a pick up truck that’s bigger than some of the condos I have lived in. I think it is grossly unfair to blame our ills on Medicare recipients who have been paying into the system for decades. Immigration is another issue, they cost a lot, whether illegal or otherwise they are allowed to receive medical care, where as if I move to Europe as an American, I must pay roughly $100,000.00 to buy into their system. Common sense is what is needed not lobbing party line or generational bombs at one another. Another thing you might consider Zack is the runaway cost of medical school enabling administrators to receive outlandish pay packages; everything is so distorted from the system that enabled America to once thrive from absurd pay for some and scraps for the rest, taxes are optional for corporations to the bought and paid for form of Democracy benefiting the one percent we are mired in.
2
Zack says "and for those receiving benefits it means thinking of your children and grandchildren."
Zack what are you saying exactly? That those needs meds now not get them in order to save some $$ for future generations? Your whole comment makes no sense.
3
@Zack While Congress may not have voted to reduce Medicare benes, Medicare benes are in fact being reduced. Reimbursements to doctors have been cut back so much that many where I live, on east side of Manhattan, now refuse Medicare patients. In addition, it is my experience, looking at how much Medicare provided for certain services for my late father 25 years ago, for my late mother 10-15 years ago, & for me now, that benefits for many types of services (think home care following a hositalization, outpatient physical therapy, etc.) are being paid for shorter periods with exclusions like "not medically necessary" being applied more literally than they formerly were. So I think we're headed in the direction you suggest anyway. With huge influx of "disabled" people in their 40s and 50s over the past few decades (once they get SS disability they are automatically covered by Medicare) the system is unsustainable without higher ss taxes & nobody, especially people like you, wants to pay higher taxes.
Was watching old 1970s movie "Harold & Maude" last week. I believe in Maude's attitude toward aging -- live life to the fullest & take a fatal overdose on your 80th birthday. I just hope we can count on docs like to you to write the prescriptions we will need to do that.The last thing I will want at 80 is some wet behind the ears doc telling me drugs are bad for me.
it's a rip off. Any meds I take are not in "the formulary" I pay out of pocket
6
@oshiyay In the next open enrollment period this fall you should look for a new plan. Formularies vary from one plan to another.
So many chronic medical conditions including high blood pressure, allergies, diabetes, migraines, weight problems and arthritis can be treated with exercise, nutrition-rich vegetarian diets and herbs, and daily access to nature. We have to free ourselves from our daily dependence on medicines as much as possible. We need good health and wellness for all.
7
I do find it interesting that insurers are always blamed for not negotiating lower prices to prevent beneficiaries from reaching the catastrophic phase even though the majority of beneficiaries who reach this phase are on expensive drugs with little to no completion. Increasing insurer liability would raise premiums to be more in line with the cost of the program, but it doesn’t mean insurers are all of a sudden going to be able to negotiate a lower prices on a drug that has no competition and hence, no reason for the manufacturer to negotiate at all. This is particularly true for drugs that are required to be covered under Part D.
4
I have encountered the odd phenomenon where simply shopping around for the best price for a prescription drug beats the price I would pay by going to my Part D authorized pharmacy. I have had a pharmacist pull me aside and whisper, "You'll pay less if you go to [blank] pharmacy and pay out of pocket."
My Part D is behaving less like a money saving insurance plan and more like a ripoff, at least for certain drugs. Part D needs revision and more regulation.
29
If one is fortunate enough to not need many if few medicines, he or she is better off paying from one's own pocket, providing of course, that the medicines are not expensive to begin with! The Medicare insurance programs, are not cheap!
14
"It's a wildly popular voluntary program, with 73% of Medicare beneficiaries participating."
Here is a fact. Medicare recipients are pretty much forced to join Part D. Medicare requires them to have drug coverage, either thru private insurance or through the private insurance companies operating through Medicare, so still private insurance. If a Medicare recipient chooses not to have this coverage at a healthy 65 yr of age, but decides a few years later to join, their Part D premium will be exorbitant by design. This is the nature of insurance, in which everyone covered has to pony up to fund it even if they never use it.
There are many lower income people who befitted from drug discount plans for their minor med needs, who lost those benefits when they turned 65 and became Medicare recipients because they are not allowed to use those discount plans if they're on Medicare. Part D automatically become default, along with it's astronomical deductible.
20
@Jrb I don't know which drug disount plans you think won't take people over 65. I am over 65, have a part D plan, AND participate in drug discount plans.
I'm part of the problem. I'm on a drug that costs thousands of dollars a month. The first month I took it I went way above "catastrophic." And my condition is chronic; I'm supposed to be on this drug for the rest of my life. I could live another 20 years. Someone should be asking why this drug costs thousands of dollars a month.
71
@Blonde Guy It costs a lot because they can charge a lot. The government pays, not you.
3
We must help our fellow voters to understand facts and to reason about them, rather than have opinions based on pure emotion.
Medicare D represents another example of corporations manipulating the government to benefit their sales. The alternative, negotiating for competitive drug pricing like the VA has done, is much better. But as long as the voters don't hold their Congressmen accountable, and as long as the Congressmen need campaign money for corporations, the taxpayer gets cheated. Wake up, voters!
75
Please stop with the assertion that the US is subsidizing R&D for the rest of the world. It would be more accurate to say that taxpayers, through the NIH, are paying for much of the really important R&D behind the drugs private companies produce. The US system is so convoluted that drug companies can charge anything they want, and they bribe Congress to keep it convoluted. Hedge funds regard pharma as a high return on investment industry, meaning profits dwarf investment. Big Pharma isn't in danger of losing money, only of having to accept normal business profits instead of the huge profits they feel entitled to. People in other countries don't accept that sense of entitlement and bargain for prices that reflect normal profit margins. Americans should do the same!
105
@Alicia Lloyd: Many Americans also believe, erroneously, that all of the leading companies in this world engaged in pharmaceutical R&D are American. Many, in fact, are European-based. They do not get away with this price gouging in their home countries.
14
@Alicia Lloyd
Please stop with the assertion that the US is subsidizing R&D for the rest of the world.
---
So, provide a study that contradicts the AMA --
https://www.ncbi.nlm.nih.gov/pubmed/25585329
I doubt you can. Good luck.
@Bang Ding Ow:
What, exactly, are we subsidizing? Isn’t there a deeper meaning than the mere percentages you provide? Couldn’t there be more meaningful percentages?
Indeed:
https://www.washingtonpost.com/blogs/ezra-klein/post/why-an-mri-costs-10...
This article and the comments therein makes me depressed, why? Because the Americans who would most benefit from either universal care, or at least the ability of the government to negotiate prices - those Americans 54%+ vote for republicans who often stand in the way of assistance to said voters. I wish I could understand this.. sad times.
50
@tekate
I met a Harvard graduate who majored in political science. I asked her, "Why do voters vote against their own interests?"
She said that it's because people vote according to the groups they identify with, not necessarily their interests. So people vote as union members, or as poor white people, etc.
13
@Norman
Also many people still cast votes based on their values and what they believe serves the country best, not only on their selfish personal financial calculations. In politics, emotion largely rules. Some low income people vote for politicians who would cut programs that benefit them. Some wealthy people vote for politicians who would increase their taxes.
@Norman
That "Harvard graduate" must have missed the reading on Adam Smith and economic freedom.
https://en.wikipedia.org/wiki/Adam_Smith
Ok gang, let's go over it again, it is not rocket science.
Let's get a universal, affordable, quality national health policy that the rest of our peer countries have and a lot of the other civilized and not too civilized world have.
It could range from a socialist plan that Great Britain has to a free market system that Canada has with gov't regulation.
There is no other term to describe our system than de facto criminal.
Let us get out of the Middle Ages.
We can do it if we want.
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@Paul
Fact: that was voted on, in Colorado, and defeated 79% to 21%.
https://www.nytimes.com/elections/results/colorado-ballot-measure-69-sta...
Blatantly ignoring reality is criminal.
1
Poppycock. Medical Part D keeps drug prices high because by law Medicare can not negotiate for lower drug prices wiith pharmaceutical companies. For example, Valsartan, a fairly basic blood pressure medicine, is $60 month in the United States, only $12.50 in Canada. Premarin, a female gynecological drug, $158 a month here but $42 in Canada. This article makes it sound as if the problem is fixable with a little category change to realign the printing incentives . Not true. The whole pricing system is corrupt.
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@Nancy Croteau
That's right, USA is subsidizing global pharm prices. Time for CDN to pay its fair share, and stop shirking.
2
Unsaid...if Republicans would simply allow Medicare to negotiate with drug companies the problem would be solved....just like it has been solved in the rest of the civilized world.
240
@Peter Trump wanted Medicare to be able to buy from Canada. Ask Melendez and Booker why they wouldn't vote for ti
2
Part D was pushed through by Republicans during the Bush administration. Not only was it completely unfunded, by law the federal government is not permitted to negotiate prices of drugs with the drug companies, as federal agencies do in other programs. The Department of Veterans Affairs, which is allowed to negotiate drug prices and establish a formulary, has been estimated to pay between 40% and 58% less for drugs, on average, than Medicare Part D.
The Congressman who negotiated this nonnegotiable price travesty, Billy Tauzin, R-La., retired soon after and took a $2 million a year job as president of Pharmaceutical Research and Manufacturers of America, the main industry lobbying group. Fourteen Congressional aides quit their jobs to work for the drug and medical lobbies immediately after the bill's passage.
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@M Anderson Wow!
@Jim: Wow! is an appropriate response to this post. Unfortunately, however, this "revolving door" between industry and its lobbying entities and government is common. This current Administration has taken it to the extreme (e.g. Scot Pruitt at EPA, Wilbur Ross at Commerce, etc.). Lobbyists and Corporate executives have been directly involved in writing regulations for their industries for decades. More people need to be aware of this practice. Republicans have fought restrictions on people moving between lobbying and government position, including elected officials. There needs to be an extended time limit (e.g. Senator or Representative cannot serve as a Lobbyist for 5 or 10 years after leaving office). These kushy lobbying positions are often payback for backing legislation favorable to that industry.
5
@M Anderson
This is a bipartisan mess. Obama campaigned, esp during the primaries, on having the govt negotiate on drug prices for Medicare Pt D, one of the many promises of change he reneged on when he got into office. The Dems had two opportunities under Obama to change the rules so that a simple majority could have passed progressive legislation. Dem majorities in both houses squandered.
4
The single most effective way to control Medicare Part D costs would be to permit the federal government to negotiate drug prices. The Medicare population is a 55 million person market and the GOP refusal to allow price discount negotiation is a travesty foisted on the taxpayers. Most drug and device manufacturers spend more on advertising, lobbying and executive compensation than on research and development so don’t fall for the argument that discounts would destroy innovation.
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@Concerned MD
Your comment reminds me that at certain times of the day and week TV is flooded by advertisements for prescription drugs. Is the viewer, usually devoid of medical expertise, supposed to "call your doctor" (just try that) and request (demand?) the advertised item? I understand that this practice of publicly touting prescription drugs, thus inflating a drug company's marketing allocations, is unlawful in Europe.
25
@Concerned MD
The single most effective way to control Medicare Part D costs would be to permit the federal government to negotiate drug prices.
---
M.D., you'd let the government workers set your prices and schedule for you? Run it like the V.A.?
I seriously doubt it. And if that happen -- PhD-pharm programs would see an exodus, faster than Bernie Sanders makes promises he has never calculated the cost of. That's a sure-money bet.
@StanC
That kind of marketing to consumers was unlawful here in the states until sometime in the late 1980s. A boondoggle for drug companies and a horror for the taxpayers....not to mention encouraging a sometimes unnecessarily over medicated population...Is there really a condition and a drug for every ache and pain???
What would a world (or the US) without insurance companies look like? Let's be truthful, it is an industry that touches every aspect of our lives. Certainly, one does not have to go out there and buy insurance, but, in many instances, like car insurance, you cannot go without..... you just "have to" have it.
1
Thousands, if not millions, of elderly simply do not have the money to cover drug expenses, if they get too high. They will simply have to do without medication, which will result in increased medical expense and possibly hospitalization, which will be more expensive than if Medicare had covered the drug expense. Unless people die first, of course, which will definitely be cheaper and therefore preferred.
26
I am a senior who sometimes could not afford my prescriptions until I found a Canadian pharmacy where I can get my prescriptions at 1/4 the cost v
8
It's called Catastrophic for a reason — spending $5K or more per year for prescription drugs is a shock to any senior's budget. I have three drugs in Tier 5/6, and hit the Catastrophic category in the very first month of the plan year, with a projected annual cost to me of $7100, not including any premiums.
There are real people who will be affected by any cutbacks to the public reinsurance subsidy until the pharma compares are convinced to base pricing of a particular drug on the costs to develop THAT drug, and not try to cover their losses on worldwide portfolio development failures too. America subsidizes R&D for the world by allowing drug companies to charge anything they want in the US, and accepting compulsory pricing almost everywhere else. That's the root of the problem — and likely not going to change any time soon.
30
"Done the law, done the scam" is what we know in Spanish as "Hecha la ley, hecha la trampa", so that somebody (in this case Big Pharma and intermediaries) may an extra buck at Medicare (part D) beneficiaries' expense. I am 77 years old, on Medicare (and part D) and on a private plan to cover the costs of medication. Trouble is, the cost is becoming prohibitive (some folks, I'm told, have to choose eating vs buying the drug!, an aberration of sorts, and certainly unjust, given the wealth of these United States, however unequal). This year, for instance, I have been buying needed medication to prevent dialysis (chronic renal disease) out of pocket, given it is cheaper than getting it from the supplemental health insurance...that 'demands' a hefty sum before it starts covering 80% of the cost drugs, and not necessarily the cheapest generic available. Another detail worth pondering on was an eye opener, when I asked an outlet specializing in buying (and selling) in bulk, the cost of a specific drug (Cyclosporine, 100 mg/day) for a year's supply: and was told that, depending on any given contractor (out of anybody's control, just the draw of luck [???]), it may vary between $700 and $3,000. How is this even possible, unless gouging is involved? I realize we live in a capitalist society, where profit is of the essence, but can't we stop playing with the health, and lives, of what is most valuable in any society, the dignity and justice for it's people?
62
Although Part D could undoubtedly be improved, suggesting that it should be comparable to commercial or employer-sponsored insurance seems to ignore the fact that there is a big difference between Medicare and those programs. Medicare covers only old people. Commercial and employer sponsored insurance covers all ages. Did the authors consider that this, perhaps, is some of the reason that 8% of Medicare beneficiaries are in the catastrophic phase as compared to 1% of commercially insured beneficiaries?
20
@Dave Actually, the population responsible for much of the growth of Medicare costs is not "old people," but younger people, people in their 40s and 50s who have qualified for SS disability beneifts, and once they do that they also get Medicare. There has been an astronomical increase in the number of these recipients over the past two decades -- due I suspect to astronomical growth of obesity related conditions like diabetes, heart disease, cancer, plus recognition of depression as a disability. Since these people are sick enough to qualify for disability benefits, you can be sure they will make maximum use of Medicare, and for a very long time.
4
When Part D was enacted under the GW Bush administration the pharmaceutical industry wrote a considerable part of the law, including specifically disallowing the government to negotiate on price as they do through the VA system.
What do you expect would come of this?
When the government chooses to represent average working Americans rather than big money interests we might see some improvement, but I wouldn't hold my breath.
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@Victor Lazaron, MD
What I find preposterous is that the government approves a law in which big pharma sings and our government dances. It should be the other way around.
12
@Victor Lazaron, MD Exactly! The author ignores the biggest scam on the American taxpayer; it is against the law for Medicare to negotiate better drug pricing.
The GOP "free market" mantra is a sham. The GOP is the party of kleptocrats.
5
@Victor Lazaron, MD
Part D, like medical insurance under The ACA, is UNAFFORDABLE, HIGH DEDUCTIBLES, YEARLY MAXIMUMS, AND PLENTY OF COMPANIES ON THE GOVERNMENT DOLE TO MANAGE THE PROGRAMS VIA THE WELL LINED POCKETS OF CONGRESSMEN ALREADY RICH BEYOND MEASURE FROM LOBBYISTS OF ALL KINDS. We already paid 1.4% of our salaries all of our working lives to pay for Medicare, WHY do we pay over a 100. a month for the medical part of Medicare and copays and yearly deductibles. Now we pay Part B premiums based upon our monthly benefit amount, ANOTHER farce foisted upon the American people.
Having the government negotiate drug costs would be a boon to the elderly who pay a lot for medications. Why this step hasn't been taken is deplorable. Unfortunately, like so many other actions that would benefit tax payers, our government apparently has more important things to do, like supporting Trump and wealthy tax payers.
The government must acknowledge that there are elderly voters and citizens who will very likely need some relief from the soaring drug costs.
We won't grow younger and we won't go away. Those are the facts of the matter.
58
This is a common experience once the government gets involved. Medicare costs have soared 5,000 % since 1960. It is the same story with flood insurance and disability payments. Everybody finds a way to sock the government. Loopholes are deliberately left in the law so that vested interests can benefit. A portion of the money goes right back into campaign finance to make sure all the vested interests are protected forever. It is the same story at every level of government. The only difference is the type and scale of corruption.
14
And how much medical expenses for everybody went up for same period of time?
5
@yulia
The government is the biggest buyer of medical care in the country. What the Government pays, sets the rate for the rest of the market. If a Physician can charge $ 75 a visit to see medicare patients, why should he charge less from the rest of his clients? There are laws that prevent the Government from negotiating properly as many others have pointed out.
A biog part of the problem is the Pharmacy Benefit Managers. Your insurance company doesn't manage your insurance, it turns this over to the Pharmacy Benefit Managers who demonstrate how well they do their job by reducing the payouts as much as possible.
PBS did a good story on this subject:
https://www.pbs.org/newshour/show/do-prescription-drug-middlemen-help-ke...
32
There is a direct correlation with rising drug prices and the enactment of this unfunded entitlement. A perfect example is insulin, once a very afordable drug, hospitals paid $10 a vial less than 20 years ago. Now you see prices surging to $250 a vial and even more. A vial of U500 costs over $1200. Seniors don’t care, the government pays. So called fiscally conservative republicans don’t care because it was their giveaway to big Pharma and our favorite industry 3rd party insurance.
42
@hb how do you now that seniors don't care? I really dislike the term entitlement, as though it's something not really entitled to but for lazy old folks. Elder Americans have worked all their lives and expected to use and paid into medicare when their time came, we paid for our parents. Another answer is universal health care then you too could be entitled.
31
@hb in MI, you say seniors don’t care, the government pays? Wow, how little you understand how the Part D program works. Copays have increased dramatically, even with a “good” Part D supplemental plan. I reached the so-called donut hole in June this year, meaning the government pays less of the inflated cost of my prescriptions, including insulin, and my cost has more than doubled. I will not reach the level for catastrophic coverage to kick in before the end of the year. Certainly seniors care, but we have no power to do anything about it. I can assure you, I do not vote for conservative Republicans and wish other seniors would do the same.
45
@hb, regarding seniors don't care, Medicare pays: "You pay 100% for insulin (unless used with an insulin pump, then you pay 20% of the Medicare-approved amount, and the Part B deductible applies). You pay 100% for syringes and needles, unless you have Part D."
Most insulin users do not use an insulin pump.
https://www.medicare.gov/coverage/insulin.html
6
Wow! Premiums rising very little? Little or no growth in premiums? My Part D premium in 2015 was 49.78/mo. In 2018 it is 83.90/mo. I believe that’s a tad more than a 68% increase.
50
@Stephanie
Precisely. Not only that, Medicare recipients are barred by federal law from joining any plans that discount their meds, such as those offered by Walgreens and others. My deductible is so high I'll never meet it unless I become chronically ill, which is the double-edged sword for those with Part D. My closest friend, 85 yrs old and pretty healthy, requires a longterm low-grade antibiotic regimen. She had to drop it two months ago when her cost of that previously cheap antibiotic tripled. She's riding on a wing and prayer now.
12
@Jrb
Oops! It's not federal law that bars using Walgreens discount program, it's Walgreens. Sorry.
4
You have just exposed the calculated way drugs have been priced in the US. The pharmaceutical companies have figured out how to get unfettered access to Medicare funds in a system that prohibits the Medicare Program from negotiating drug prices. That leaves the incentive for all pharmaceutical companies to raise prices to phenomenally high levels—eg. EpiPens. Check drug prices at Good RX. There is common ground for all parties to fix this hemorrhage of federal dollars.
53
I have proof that Lloyds of London sold insurance directly in Colorado. My proof consists of a verified attorney bill with an address in Chicago, a policy number, and the name of the insured -- a Colorado prosecutor.
This proof is on PACER in District of Colorado 02-cv-1950 document 465.
I complained to the Colorado Division of Insurance. I'd appreciate it if other people would contact the Division of Insurance about Lloyds and other insurance companies selling insurance in Colorado what was not approved by any U.S. regulator.
4
Some things in my experience disagree with what the article notes.
First, the premiums my wife and I pay for our Humana Part D plan went up by about 15% last year. The monthly premiums are still quite low. But the coverage is limited. Some of her meds are not in the lowest group. Ie, we pay more in co-pays than a minimum amount for her meds.
Second, there are TOO many plans to choose from. It is confusing to try to compare one vs another.
Bottom line for seniors like us who use Part D: it is not as helpful as it COULD be if it were run differently.
31
@richard
"Second, there are TOO many plans to choose from. It is confusing to try to compare one vs another."
Before my mother-in-law passed away, I researched the various Part D plans in an attempt to save money on her out-of-pocket prescription costs. It was very, very difficult to compare the plans especially when you took into account the fact that different pharmacies charge different amounts for the same drug and varied in their coverage/reimbursement for the various tiers of drugs. Overwhelming and confusing!
35
@richard Try logging onto medicare.gov, where you can easily compare drug plans. You simply fill in your drug list, choose a pharmacy or two, and the program will slice and dice the premiums, co-pays and deductibles to list all the available plans in descending order according to lowest estimated cost. You may also do be able to do this through your local area agency on aging. Remember that any change to your plan should be made during open enrollment, Oct. 15 to Dec. 7, for the 2019 calendar year.
@richard When my Humana Part D premiums skyrocketed last year I switched to a different plan. Not only is my monthly premium 20% less than it would have been under Humana, but the copays I pay for the few drugs I take are much less -- in one case, for the one drug I take every day, the copay went down to $0 from $6.50 a month. I did my research. I think the insurers count on seniors being too confused, lazy or unable to use a computer to do the research to get a better deal. In many areas there is a community group -- like local council on aging, that can do research for you.
If you don't want to pay for a Part D plan, or even if you do, enroll in a free drug discount plan, like Blink Health or Good Rx, where copays are often less than under your Rx plan.
https://dealbook.nytimes.com/2012/09/04/with-lax-regulation-a-risky-indu...
The hedge fund industry has been rushing headlong to open Bermuda-based reinsurers.... a hedge fund can set up a reinsurer in Bermuda or the Cayman Islands. Under the regulations of these islands, the new reinsurer can then use the premiums it collects to invest with the hedge fund itself ....This new market is arising outside the United States, mostly in Bermuda and the Caymans....these new companies are regulated as reinsurers. And Bermuda requires only minimal capital requirements and disclosure of financial positions, and it does not strictly regulate how these companies invest their money. The Cayman Islands has similarly light regulation....For American regulators, the reinsurance industry is largely outside its jurisdiction, dominated as it is by foreign companies. So no regulator is really watching to ensure that these reinsurers ...
19
@Kay. My other comment wasn't approved. It concerned the fact that Lloyds of London sold insurance to a Colorado prosecutor, that I have a verified bill for this insurance with a claim number and an address in Chicago, and that I reported to the Colorado Division of Insurance that Lloyds sold insurance directly in Colorado but they did nothing to stop this.
Here is an ad for Lloyds Beazley unit:
https://www.beazley.com/london_market/specialty_lines/professional_liabi.... "Our US clients are served by both our Lloyd's and US-based underwriters, including our private enterprise team that focuses on the insurance needs of smaller scale clients."
The NAIC has no record of Lloyds selling in Colorado
2
Jan 2013 60 gram tube of GENERIC clobetasol cost about 16 dollars.
June 2014 CVS CareMark U&C cost of a tube was about 64 dollars
July 2014 CVS CareMark U&C cost of a tube was about 450 dollars for a Medicare patient who was in the "hole" right away because she had a script from a dermatologist for seven tubes given a total body autoimmune related rash. The patient was on a Low Income Subsidy so paid 4 or so dollars for a one month script of 7 tubes. The patient though was aghast about the prices she saw on her receipts. Guess who picked up the tab?
Current self-pay cost of a tube is about 190 dollars from CVS Pharmacy with goodrx coupon. Cash price is about 400 dollars.
Gee, wonder how CVS Health was able to buy Aetna for 77 billion dollars? One cannot imagine how a Pharmacy "benefit" Manager could amass all that money, or can you guess?
The patient is willing to appear in testimony before a congressional hearing BUT the perfidy of the POLs (Democrat & Republican) will prevent this prevarication from ever being heard for corrective action to occur.
Ask any dermatologist what happened to the cost of clobetasol after the ACA was passed. AND this is a GENERIC medication coming from multiple brand names as Generic Temovate, Clodan, Cormax, Olux, Clobex, SO there should have been a "free market" of competition, right?
Wrong, PHARMA, Drug distributors, Pharmacy Benefit Managers uber-profiteer off the public purse with political retribution impunity as usual.
131
@cbahoskie -- have had same issue with Part D for clobetasol -- widely varying prices from multiple hundreds to 80's for one prescription.
1
" Bringing premiums more in line with program spending"? The author really is saying: raising monthly premiums by a huge amount to be paid by the elderly retirees. Why doesn't Mr. Frakt plainly write this? Was raising premiums his position prior to his research, which he used in his paper to justify a previously held belief, possibly rooted in a political viewpoint?
47
@Mike Raising Medicare premiums by a huge amount would be genocide, unless SS benefits increased by the same amount.
1
Then, of course, looking more long-term, we could look at reforming how drug research and manufacture are funded. The goal is to produce medications for as many conditions as needed at as reasonable a cost as possible. Government could provide research funding to universities and other research centers, with contracts for the production of the resulting drugs awarded through a bidding process involving both cost and quality.
I remember how Big Pharma was not interested in Zika, seen as affecting only poor people, but in a few months university researchers had found out how the virus affected fetuses and how a vaccine could be developed. No money had to be spent buying off Congress, and no one cared whether hedge fund investors would get a huge return on their investment. Human suffering would be diminished and human health increased, the measures that really count.
39
@Alicia Lloyd
The Bernie Sanders crowd here, they deserve the best of their work. Let them create their own "single payer" system, and fund per-capita. And others can keep theirs.
And IMHO, within a year, like how the BHO "public option" cooperatives went bankrupt, the Bernie Sanders systems would go bankrupt .. due to poor financial skills.
I hope they get what they want. Because they deserve it.
@Bang Ding Ow:
Prior to the passage of the ACA, President Obama took public options off the table in a show of compromise with Republicans. As such, your post is patently false.
As for the jabs at Bernie Sanders throughout this forum, I don’t get people like you, who can only manage to respond with jeers and taunts, instead of a reasoned argument supported by credible, verifiable data. It’s as tiresome as it is childish.
1