Best Laid Medicare Plans

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Under Medicare Part D, which gives consumers the choice of what prescription drugs they prefer, Lambert van der Walde with the Centers for Medicare and Medicaid services said that despite having the option of a low government-formulated plan, Medicare recipients are willing to pay more for better benefits.

“Seven percent of Medicare enrollees chose the congressionally-formulated structure,” van der Walde said recently at the American Enterprise Institute. “More than 64 percent were willing to pay higher premiums for a better plan.”

Helen Levy and David Weir with the University of Michigan conducted a study in 2006 entitled, “The Impact of Medicare Part D on Utilization and Out-of-pocket Spending,” in which they claimed that Medicare Part D actually lowered out-of-pocket expenses for recipients. However, Levy explained that the Part D coverage did not measure up to the employer’s healthcare coverage, which saved Medicare recipients’ additional monies in terms of cost.

Dana P. Goldman, with the Rand Corporation, said that “Medicare Part D reduced pharmaceutical prices, but increased the utilization of prescription drugs.” However, The Center for Medicare Advocacy Inc. presented an entirely different perspective about Medicare Part D coverage.

According to a July 19, 2006 report produced by the Center, many Medicare recipients have been experiencing problems with the Plan in terms of its complexity and high cost. The Center received complaints disclosing that “thousands of people are experiencing problems and high costs due to the lack of a uniform prescription drug benefit in the Medicare program.” The Center explained, “the design of Medicare Part D promotes enormous variation in the type of plans offered: enrollment, experiences, covered drugs, what counts against the Donut Hole coverage gap, plan costs and appeals.”

Thus, the Center concluded, “while some people are better off than they were before Medicare Part D, many people remain confused and frustrated by its complexity and limitations.” Therefore, the Center suggested that “the best solution for the problems with Part D is a redesigned prescription drug program that is standardized, available throughout the country, and administered through the traditional Medicare program. This system would be more valuable for more beneficiaries and more cost-effective for tax payers.”

Irene Warren is an intern at the American Journalism Center, a training program run by Accuracy in Media and Accuracy in Academia.