When Marion and Joseph Young signed up for one of the new Medicare prescription drug plans, they did what government officials said everyone should do: Shop carefully. They found a plan with no premium and no deductible. Most important, they made sure it covered the critical medications needed for the struggle both are waging against multiple sclerosis.
To their consternation, however, they discovered that their most expensive MS drug was relegated to a special category that required them to pay a much higher share of the cost. Together, they can expect to pay nearly $9,000 a year for their medications and about $1,500 apiece in some months -- a cost that's almost impossible for them to meet.
"The drug is on the formulary, but we can't afford to buy it," said Marion, referring to the list of covered medications.
Months after the government rolled out the most important new healthcare benefit for the elderly in decades, beneficiaries are still discovering new catches in the program's complicated inner workings -- details that can defy the scrutiny of even the most careful consumers.
Whereas many officials had expected the drug plan's problems to be subsiding by now, as beneficiaries learn to navigate its admitted complexities, the Youngs and other recipients are discovering new surprises in the fine print.
And, with a May 15 deadline looming for choosing or switching providers, many are running out of time. Once beneficiaries pick a Medicare prescription plan, they must generally remain in it for a year. This year, all beneficiaries can make one switch before May 15.
"Medicare Part D is like a plan from outer space," Joseph Young said in a recent interview. "It's a deceitful thing to have done to people."
Although 75% of seniors enrolled in the new drug plans say they are satisfied, a Kaiser Family Foundation poll released last week found their enthusiasm is lukewarm. When asked to grade the new benefit, only 8% of enrolled seniors gave it an A; 13% gave it an F. The most common grades were Bs and Cs, each drawing 30%.
Although a majority of enrolled seniors said they expect to save money, the poll found that about 1 in 5 said their medications would now cost more, and roughly the same proportion said they had had problems getting prescriptions filled.
Many of the problems arise because of tensions that lie at the heart of the program. Medicare Part D was created to give needed medications to the elderly at affordable prices. At the same time, it was supposed to hold down the overall cost of healthcare. In trying to achieve both goals, while also making profits, the private companies that deliver the benefits have created plans that are not only complex but are also laced with little-understood provisions that shift costs to patients.
What the Youngs and thousands of others in similar situations have run up against is a wrinkle called a "tier," a feature common to many of the private insurance plans that deliver Part D benefits. While all plans have long lists of covered drugs, or formularies, many also have separate categories, or tiers, for some of those drugs -- often those priced at more than $500 a month. Drugs in the upper tiers carry substantial extra costs for patients.
The coverage tiers are just the latest example coming to light of how some of the finer points of the plan don't become clear until seniors have signed up. Unless beneficiaries look closely at plan materials, they may not realize their drug is on a higher tier. Similar wrinkles have included restrictions on some mental health drugs, seemingly modest co-payments that cumulatively strain the budgets of low-income seniors, and coverage of intravenous drugs -- but not the supplies and nursing assistance to administer them.
Medicare "gives considerable flexibility to the plans, and many have chosen to derive a significant percentage of revenue through these patient cost-sharing mechanisms," said Dan Mendelson, president of Avalere Health, a healthcare consulting firm. "The downside is that if you have certain illnesses, you are going to be paying more."
Mendelson said his firm's examination of nearly 3,000 variations of Medicare drug plans showed that they make greater use of cost-sharing tiers than comparable plans that private employers set up for workers and their families. While the typical employer plan has three cost tiers, the most common type of Medicare plan has four or more tiers. Some plans have as many as eight.
Even critics agree that some form of cost containment is essential. But benefits need to be considered too, they say. "We can't keep buying everything that comes through the FDA pipeline, but here it seems like cost is the first consideration, and that's not appropriate," said Larry Sasich, a professor of drug policy in the School of Pharmacy at the Lake Erie College of Osteopathic Medicine. "This just looks like cost shifting."
