Why the Medicare Prescription is so bad. "The Deadly Doughnut"

[Cleita]

By Paul Krugman
The New York Times
November 11, 2005

Registration for Medicare’s new prescription drug benefit starts next week. Soon millions of Americans will learn that doughnuts are bad for your health. And if we’re lucky, Americans will also learn a bigger lesson: politicians who don’t believe in a positive role for government shouldn’t be allowed to design new government programs.

Before we turn to the larger issue, let’s look at how the Medicare drug benefit will work over the course of next year.

At first, the benefit will look like a normal insurance plan, with a deductible and co-payments.

But if your cumulative drug expenses reach $2,250, a very strange thing will happen: you’ll suddenly be on your own. The Medicare benefit won’t kick in again unless your costs reach $5,100. This gap in coverage has come to be known as the “doughnut hole.” (Did you think I was talking about Krispy Kremes?)

More...........

http://www.pnhp.org/news/2005/november/the_deadly_doughnut.php

[niallmac]

1. WOW! and Thanks for the peek at this boondoggle.

The doughnut hole. Strange legislating.

[serryjw]

2. Only one of many things wrong with legislation

a huge hand out to the pharma companies.

1) you need to register for one year at a time
2) with 60 days notice they can raise your rates on a RX
3) if you need to fill a new RX and its not on the list you are shit our of luck
4) the pharma will control costs based on whom signs up and what they are requesting....and you can't change companies for one year, and they next company will do the same thing

Has anyone asked themselves WHY they MUST sign up in the next 6 months? They need a beginning and an end, so they can adjust the selling price based on demand of a specific drug.

[Cleita]

3. This plan is so wrong on so many levels, but the one

that pisses me off the most is that it is a way to raid FICA tax money for the benefit of big pharma and at the expense of some of our most vulnerable citizens, our seniors.

[niallmac]

4. and I will NEVER forget that AARP aided and abetted this bill.

[Cleita]

5. Me neither. n/t

[Viva_La_Revolution]

6. The Repug hour on CSPAN.... argued for it

Dems are on now

[Cleita]

7. I didn't see it. What happened?

[Deja Q]

8. And yet it STILL costs $720 billion...

Can't they regulate the snake oil peddlers and save all that money?

[Cleita]

9. That money that could help seniors, even the ones that

you don't like, is being sent into the black hole that is known as "we steal everything in government spending that we can and blame it on the tax and spend Democrats". It's especially bad when they steal from little children and old grannies.

[serryjw]

11. They have done a great job of raiding the US Treasury

Wait until the under 40 (Republican) crowd realizes their vote destroyed their future

[Bozita]

10. Don't miss Krugman's latest ... "Health Economics 101" -- link

http://www.truthout.org/docs_2005/111405M.shtml

-snip-

   To understand adverse selection, imagine what would happen if there were only one health insurance company, and everyone was required to buy the same insurance policy. In that case, the insurance company could charge a price reflecting the medical costs of the average American, plus a small extra charge for administrative expenses.

    But in the real insurance market, a company that offered such a policy to anyone who wanted it would lose money hand over fist. Healthy people, who don't expect to face high medical bills, would go elsewhere, or go without insurance. Meanwhile, those who bought the policy would be a self-selected group of people likely to have high medical costs. And if the company responded to this selection bias by charging a higher price for insurance, it would drive away even more healthy people.

    That's why insurance companies don't offer a standard health insurance policy, available to anyone willing to buy it. Instead, they devote a lot of effort and money to screening applicants, selling insurance only to those considered unlikely to have high costs, while rejecting those with pre-existing conditions or other indicators of high future expenses.

    This screening process is the main reason private health insurers spend a much higher share of their revenue on administrative costs than do government insurance programs like Medicare, which doesn't try to screen anyone out. That is, private insurance companies spend large sums not on providing medical care, but on denying insurance to those who need it most.

    What happens to those denied coverage? Citizens of advanced countries - the United States included - don't believe that their fellow citizens should be denied essential health care because they can't afford it. And this belief in social justice gets translated into action, however imperfectly. Some of those unable to get private health insurance are covered by Medicaid. Others receive "uncompensated" treatment, which ends up being paid for either by the government or by higher medical bills for the insured. So we have a huge private health care bureaucracy whose main purpose is, in effect, to pass the buck to taxpayers.

-snip-

more...

[Cleita]

12. Thanks for posting this.

The more information on this the better. I feel that once this drug "benefit" kicks in, people affected by it will find out that it benefits the pharma corporations and no one else. Then I think you will see seniors and their families insist that their elected representatives pass another law that corrects the flaws in this one.