Medicare options are mystifying

New plan is all complexity and little value

By TIM McDONALD

Editor’s Note: As an educator Tim McDonald assigns grades on a daily basis. So with his new column, he will visit issues that affect us and assign a grade to the responsible issue makers.



What do a Ouija board, a mystic and Miss Cleo (of 900 number fortune telling fame) have in common? If you are a senior citizen you need all three to figure out which plan to select for your Medicare Part D. If you didn’t already know this was a government project, you have to guess it was.

I would like to think that my tax dollars were spent better than coming up with 40 to 50 plans (depending on the state where you live) where five should suffice. I think Medicare is terrific, but to put senior citizens through a ridiculous process like this comes close to cruel and unusual punishment. It’s bad enough that you have to list all of the medications that you are currently taking and the pharmacies in your zip code to evaluate which plan (remember out of 40 to 50) is the best for you. But you also have to gamble that any new medication in the future will also be covered by the plan you choose.

Not only do you have to choose from all those plans based on medications and pharmacies but also you must calculate between competing plan the lower formularies (the amount you pay out of pocket at the pharmacy) for the majority of your prescriptions. To date — according to an ABC News report — out of the 43 million eligible for the program only one million have enrolled. Seniors still have until May to enroll in the program but the slow enrollment sends a clear signal that this is not an easy process.

Here is the real kicker. The American Association of Retired People, the most powerful lobbying group on Capitol Hill, went along with this plan as the best they could get. In April of this year I will be invited to join that group as I turn 50. I don’t think so.

From what I can see, in talking to friends of mine that are AARP members, all you get for your membership are a few travel discounts and a barrage of marketing mailings from insurance companies.

Look, if actuaries can figure out life expectancies and risks for life insurance it’s not a stretch to evaluate the risks in growing older. Osteoporosis, heart medication, blood pressure medications, diabetes, arthritis medications, flu shots cover the main arenas for the post 65 set. Through research, most cancers have become chronic diseases with longer life expectancies.

The pharmaceutical companies claim that the higher prices are needed to recoup the research and development costs. Not so fast. According to and FDA report, the major pharmaceutical companies have doubled their spending on consumer marketing of prescription drugs doubling from 1997 from approximately $1.3B to $2.7B in 2002.

Hospitals overcharge for services because they know that the insurance companies will bring them back to reality.

We are a free market economy and as such the market should determine the amount charged. At the very least, Congress should have created a bidding process for the large insurance companies to compete for the business. In states where a large insurance company does not do business they could enter into a joint venture.

Congress missed the boat on this one. First of all they failed to recognize (what good businesses do recognize) their customer base. They made the options available on the web when most of their customer base does not use the web.

I encourage you to write to your elected officials (Representative Mike Sodrel and Senators Bayh and Lugar) to have Medicare revisit this and require the major insurance companies to pool together to make this a much simpler process for the U.S. population who is aging rapidly.



An “A” goes to the senior citizens for slogging through this ridiculous procedure.

A “C- “ to Medicare and Congress for a half hearted effort and an “F” to the most powerful lobbying group on Capitol Hill short of the pharmaceutical lobby, the AARP for their pathetic effort in looking out for the best interests of their constituents.



Tim McDonald is a former sales executive with Knight Ridder and Dow Jones and currently teaches Government and Economics at New Washington High School. He can be reached at tmcdonald@gcs.k12.in.us

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