On Monday, Medicare (and Medicaid) turn 45. And to celebrate, the government will be touting its annual open enrollment. Well, okay, the feds will also be throwing in a plug for government’s role in health reform and what benefits are in store for those who were spring chickens when Medicare became law. Who better to message than the avuncular Andy Griffith?

Clearly targeted at those seniors who still think “death panels” are an essential creation of the Obama plan for reform, the ad — which begins airing in some markets today — will mostly focus on the benefits for seniors inherent in standalone or the program’s supplemental plans under reform. There will be no mention, however, of the major way the new reform law will maintain Medicare solvency well into the next couple of decades: trimming the fat from Medicare Advantage payouts from plans which originally saw benefit under the George W. Bush administration’s 2003 Medicare Modernization Act. | LINK

Beginning this week seniors should have already started receiving checks from the federal government for the purpose of closing the so-called donut hole — a provision of the MMA of 2003 that left many Medicare Part D beneficiaries out in the cold when trying to pay for their prescription drug coverage. People who fall into this gap are responsible for $3,610 in drug costs in 2010 before their Medicare coverage kicks in again. The “hole” is gradually being phased out over the next 10 years.^[1] Over 4 million people will receive $250 checks this year.

Sounds innocuous enough. But one state is asking the government to reclaim those funds. Vermont, which has some 2800 low-income seniors scheduled to receive the Part D refund checks, is asking beneficiaries to return the money. Since the state of Vermont is funding drug costs for its beneficiaries via public-funded insurance programs (OVHA), it is asking seniors to return the checks — as the state is on tap to receive almost $600,000 in rebates due to the action.

While the goal of the feds is to eliminate this troublesome provision as part of Obama’s healthcare reform package, this episode does highlight the difficulty some states have with federal mandates to cover certain costs associated with the delivery of healthcare when they essentially don’t agree with those mandates. By the way, if seniors decide not to refund the government’s money, says Vermont, they will be subject to a $250 deductible in their state-subsidized insurance plan for drug costs. | LINK

1. Next year, the rebates will be replaced with discounts that will increase each year until the gap is effectively eliminated in 2020. [↩]

How’s this for the ultimate Medicare entitlement irony? Medicare Part D offers, among many other benefits, the option for qualified beneficiaries to enroll in medication therapy management (MTM) plans with their pharmacy. The goal is to create a better informed patient-as-consumer among  myriad Medicare D  beneficiaries who suffer from many chronic illnesses requiring substantial polypharmacy — and hence, costs, to maintain their current state of health, improve it, and hopefully prevent further comorbid decline. To qualify for such a benefit within Part D, the beneficiary must be enrolled in the Medicare Part D drug program, have at least three chronic health conditions, take eight or more medications covered by Part D and spend at least $3,000 yearly on the medications.

Sounds fair enough and tailor-made for many seniors in the program. But there’s one problem: expense. Increasing numbers of racial minorities — predominant among them, Latinos and African-Americans — cannot afford many of those Part D-covered medications. They are less likely to gain medical access for a host of reasons, and cultural encumbrances make that latter problem more profound. Researchers studying this issue cite the potential problems that may occur with widening the racial healthcare disparity in terms of access — whether it be for affordable pharmacy or acute medical care. If it is incumbent upon the Obama administration to enrich Medicare on many levels, the systematic exclusion of many patients not able to take part in any part of the entitlement may set out to increase future healthcare costs if access to these government programs remains prohibitive | LINK

It’s that time again: open enrollment for Medicare Part D. Ordinarily, items such as this don’t really generate newsworthiness. However, these aren’t ordinary times; given the state of the (healthcare) economy, anytime one connects the dots between the country’s largest care guarantor and the potential for greater coverage pools — it’s time for intense wonkishness to rear its ugly head yet again.

The big question is whether or not Part D makes sense for the consumer. New this enrollment period: (1) premiums will rise another 10% percent;^[1] (2) the vast majority of standalone prescription drug plans (60% or so) will require a deductible in ’10, maxing out at just over $300; (3) finally, with respect to so-called “benchmark” plans,^[2] qualified beneficiaries will still have to pony up a percentage of their premium if they want to stay in their plan or will have to switch plans altogether.

Bottom line, it’s all about cost-sharing as a mechanism for controlling costs, at least with respect to Pharma and Medicare Advantage plans; and, in a pharma marketplace which is forecasted to remain rather staid next year,^[3] profits have to be generated from many levels. Medicare Part D has its share of choices for the beneficiary, but due diligence will be the guide to retaining skin in the game for the patient as savvy health care consumer. | LINK

1. up 50% overall from when MMA (2003) created the part D provision for launch in ’06 [↩]
2. those in which basic Part D is offered for those who qualify for a premium [↩]
3. Many popular brand name medications are scheduled for generic release in 2010. [↩]

The country’s largest drug lobby, PhRMA, spent $6.9 million during the first three months of this year on lobbying expenses, an almost 40 percent jump from what it spent on average per quarter last year. The biggest reason for all the new hires? Democrats. The lobby is particularly targeting Sen. Baucus — the leading reform figure and Sen. Kennedy alternative to a more conservative approach to Obama’s proposed healthcare reform package. Recall that PhRMA recently pledged $80M to the healthcare reform effort, with 2/3 going to fund, among other things, a so-called “reform fee”, which will charge pharma companies a fee to cover any difference between the cost of Medicare, Medicaid and biogenerics programs and the $80M spending commitment. Are PhRMA lobbyists trying to pre-empt efforts of some congressional Democrats’ attempts at industry price controls as part of the reform package? | LINK

How about this as a case of cost shifting? Some states are considering whether to cut off aid for patients who will reach the doughnut hole in their Medicare Part D coverage (that gap in coverage that starts when benefits exceed $2700 of the beneficiaries’ cost of care). Considering the average patient over 65 years of age takes at least 5 prescription medications, the cost savings to bring aid to patients in the Part D coverage gap may pale in comparison to the costs to treat them when they get sick as a result. Hospitalization occurs, and, well, we all know what happens to the cost of healthcare once preventive services are shifted to the acute care realm. | LINK

• Medicare alters benefit formula for 2020 pharma plans.
• Physicians puzzled as to Apple CEO’s health.
• Did you know there was a plan in place to epidemiologically eradicate the measles virus by next year? Apparently, there are some speed bumps in the road.

The global plan to eradicate measles by 2010 is unlikely to come about say epidemiology experts because of high rates of infection in some parts of Europe where many children go unvaccinated.

• Blue Cross of California plans to reinstate coverage for patients it had dropped in response to investigations by the LA Times.
• An speaking of California, many healthcare workers are not screened adequately for criminal pasts.

Happy New Year! from Doctor Pundit. Posting to resume on 1/2/09.

• Minnesota’s most populous county will end fee-for-service Medicare. Sign of the troubled economy? Docs gotta put food on the table, too.
• Medicare Part D open enrollment to end on 12/31.
• Healthcare plan beneficiaries scramble to take advantage of last minute procedures before benefit resets on 1/1. Looks like some docs will put food on the table.

At a time when the weak economy is hurting the industry, medical groups say they are grateful for the bump in business, however temporary. To cope with demand, doctors are adding hours and delaying vacations. High-deductible plans with health savings accounts were introduced in 2004 and now cover about 10 percent of insured Minnesotans. At the same time, deductibles for traditional plans — known as preferred provider organizations — also have jumped, with a $1,000 deductible now the national norm, according to benefits consultant firm Mercer.

Never has the need for transparency been greater for the Medicare Part D drug plan than when the new so-called reference-based pricing will begin on covered branded drugs possessing generic equivalents, in January. Under this plan, beneficiaries will have to pay an additional fee for these drugs under Part D, as opposed to other drugs which have no generic equivalent. Let the confusion begin.

[C]ritics complain reference-based pricing can result in hidden charges. “I am concerned that beneficiaries could find themselves paying far more out-of-pocket than they expected,” Rep. Pete Stark, chairman of the House Ways and Means health subcommittee, recently wrote in a letter to the Centers for Medicare and Medicaid Services. “CMS needs to make sure that beneficiaries are aware of these penalties before they choose their plans.”

Is this a job for the new HHS Secretary? | LINK