A new study released by Part D advocacy group Medicare Today makes a compelling case for seniors’ enrollment in Part D. Authored by the Lewin Group (an excellent and unbiased health care reseach and analysis firm) the study makes a compelling case for seniors to enroll.
It makes an equally compelling case for adverse selection.
The only seniors who are signing up are those that can make money on the program. They make money because their premiums will be less than what they are spending on drugs today (or would be tomorrow). The Lewin report provides details on who benefits the most, what the average cost is ($37.43/month), and what benefits accrue to individuals with which conditions. It’s really well done.
Make no mistake; this is not insurance.
The Part D program is akin to an ATM card where you can withdraw any amount you want, as long as you pay a set minimum price. So, seniors, no dummies when it comes to managing money, can pretty quickly figure it out.
What’s missed in the discussion about Part D is the better off seniors are, the worse off taxpayers are. The ATM account has to be funded by someone, and that someone is the beleagured taxpayer.
This is nothing short of bizarre. The Feds are actively and aggressively encouraging enrollment in a program that will cost three-quarters of a trillion dollars over the next ten years, while cutting taxes that will be needed to pay for this program.
What does this mean for you?
Really high taxes in a few years. Followed by a taxpayer revolt. After which Congress will likely authorize the Feds to negotiate pricing with big pharma. Because the only other choice is to cut benefits, and seniors would never allow that.
May
12
Excuse me, but I missed something. How is the Part D fiasco going to cost the taxpayer anything!! As a fed suck-up deal with PRIVATE INSURANCE, it’s participating SENIORS footing the bill. TAXES?!?! I did my homework and found Part D would cost me $550 a year MORE than paying for my Diovan and Lipitor out-of-pocket. (See angrysenior.blogspot.com) But that’s compared to the best INSURANCE COMPANY plan I could find (of the 52 plans offered in my state)! Please clarify the TAX angle.
i’m very unhappy so far with my part D ins. they turned me down for a medicine i’ve been taking for a couple of yrs. the one and only we found that really worked for me, and put me on somehing that didn’t work several yrs ago. I have an appeal, but haven’t heard anything for two weeks yet. mean while, I felt like I was dying abruply comming off the other med. so Im having to share with my daughter, which is the same med I was on. ins. co. doesn’t care as long as they feel they have the power to tell you what to do. My Dr. would not have given me the meds. I’m use to, if I didn’t need them. Im thinking about dropping the ins. I was getting free meds until I had to take out the part D. thought it would help me but its making thins worse fore me. something has to be done. I know theres a war going on, but there are people dying here at home to just for reasons like this. Our goverment seems to have forgotten about us seniours trying to make ends meet on social security. thanks for any ideas.
Angry Senior – here’s the original post answering your question. https://www.joepaduda.com/archives/000358.html
No, seniors won’t end up footing all the bill; as presently constructed Part D’s voluntary enrollment process means only those seniors that will benefit financially, and relatively few who won’t, will sign up.
Insurance should be providing protection against very high drug costs which few people can afford to pay instead of socializing much of the cost of relatively low and quite manageable (for most people) routine expenses.
With all the talk about extending the signup deadline because of early confusion about choosing a plan, combined with Joe’s comments about adverse selection, perhaps the 1% per month penalty should be significantly increased to 3%-5% per month in order to increase the cost to people who are gaming the system by waiting until they get sick and need expensive drugs before signing up.