Wednesday, March 22, 2006

Medicare Part D – Part of the Muddle

Wife Marilyn and I have just enrolled in the much maligned Medicare Prescription Drug Plan (Part D). The decision to do so arose out of the decision to drop our Medicare Supplement Plan (another story). We thought that enrolling in Part D made sense for two reasons. One was that it seemed prudent to protect ourselves against catastrophic drug costs. The other was that we would benefit from the government subsidy and whatever discounts the insurance company had been able to negotiate with drug companies.

I did it via the Internet. The process took some time and focused attention, but was not as onerous as I had expected. The web pages of both the government and the insurance company were well designed and easy to navigate.

Without computers and the Internet, about the only thing you could do would be to find an insurance company that covers the drugs you are taking and has a relationship with a nearby pharmacy, sign up and pay the quoted rate.

With a computer and Internet access you can compare the alternatives. What you do is to go to Part D section of Medicare’s web site and enter your zip code and the drugs you are taking. You then get a list of the insurance companies that offer plans in your area and cover your drugs. In our case there were about four such plans. The list also shows the general features and monthly cost of the least expensive plan offered by that company.

I then went to the web site of the company that looked most promising and entered the drugs we are taking. The web page then computed an estimated annual out-of-pocket cost for each of that company's plans (I think there were four). Each plan has different co-pays and deductible. As it turned out for us, the least expensive plan also involved the lowest total out-of-pocket cost. So the decision was pretty easy.

I am now less negative about Part D than I was originally prepared to be. It is complicated, to be sure. But if given the job of designing a better way to go about it, I’m not sure what I would do. Medicare could have done it directly, but that would have required it to set the rates it would pay, as it does with its Parts A and B. Given the wealth and clout of the pharmaceutical industry, and its demonstrated willingness to use them, the politics of that would be horrendous.

It seems clear that we will not be redesigning our health care system according to some preconceived plan. Instead, we will muddle through. Part D is just one part of the muddle.

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