The Employee Benefit Research Institute (EBRI) (2004), in its Issue Brief # 271, provides for an extensive discussion on the Part D program before it was implemented in 2006. The MMA, according to the Employee Benefit Research Institute (2004), was expected to make it easier for workers to prepare to pay the medical bills they will confront in retirement: prescription drug benefits (through the Medicare Part D) and health savings account (HSAs).
Part D was intended to be available to those beneficiaries who elect Part B coverage and would make it easier for them to avail of lower prescription drug costs, especially for the growing majority with no employment-based drug coverage (Employee Benefit Research Institute, 2004). Unfortunately, in spite of the lofty intentions behind the spirit of the law, the Part D plan has reaped a series of unexpected disadvantages for its intended beneficiaries. In an article by Louise M.
Slaughter for The New England Journal of Medicine (2006), Part D was criticized for being more beneficial to pharmaceutical and insurance industries than for beneficiaries. Slaughter (2006) criticizes Part D for being a flawed plan which was drafted without putting the best interest of its supposed beneficiaries – namely the elderly and disabled, pharmacists, nursing homes, and families – and stands to benefit primarily the pharmaceutical and insurance companies instead.
The impact of accommodating people with low-income for the states and the very beneficiaries themselves who are involved, was also extensively discussed in the website of the Center for Medicare Advocacy, Inc. (2007). According to the “Medicare Part D” report by the Center for Medicare Advocacy (2007), the MMA establishes a low income subsidy for the costs of Part D with states implementing State Pharmaceutical Assistance Programs (SPAP) to enable cost-sharing and supplemental drug coverage for dual eligibles and low-income beneficiaries under Part D.
This has been a heavy burden to bear for many states, particularly for those where health benefit costs have been a persistent problem (Center for Medicare Advocacy, Inc. , 2007). According to the Seventh Annual WBGH/Watson Wyatt Survey Report (n. d. ), health care has become a total business issue which employers must face, particularly with the expected increase in health benefit costs for 2007. The Watson Wyatt Worldwide (n. d. ) survey interviewed nearly 300 companies, which collectively provide benefits to more than 10 million employees and dependents, on their strategies to address and stem the tide of rising health care costs.
The survey provides that no single solution will fix the health benefits problem, and requires employers and employees alike to step up to address the issues in their own ways (Watson Wyatt Worldwide, n. d). Marilyn Stebbins (2006), clinical professor in the University of California, San Francisco School of Pharmacy, in a statement, points out that the main problem of the Part D plan was the enrollment process during its roll-out – a process which remains problematic until today.
Eligibility information on dual eligible beneficiaries were not properly disseminated to Medicare and insurance companies offering the plans. According to Stebbins (2006), CMS estimated that about 15,000 people might be affected during the transition period for the Part D program, but that in reality, for the first month of its roll-out during January 2006, already 250,000 patients in the state of California alone have had problematic claims since January 1. Dual eligible beneficiaries were not recognized as such, and did not receive their lower cost, supplemental benefit, or failed to received any benefit at all.
They were charged higher amounts for their medications, and even for many of the people who signed up for their plan on the Medicare website, many were not recognized by the plan or by Medicare as having chosen that plan, or any plan, for that matter (Stebbins, 2006). The US government likewise duly noted such problems in the Part D roll-out and transition period. The BenefitsLink. com website provided for information from the U. S. General Accounting Office, through the testimony of Kathleen M. King, Director of Health Care, before the U.
S. Senate’s Committee on Finance, particularly dealing with the impact of Part D on dual eligibles. In her recent May 8, 2007 statement to the Senate, King examined the problem with CMS’s complicated enrollment process for the Part D plan for dual eligibles, and their lack of information as to their right of reimbursement. According to King (2007), CMS’s process for enrolling new dual eligible beneficiaries takes a minimum of 5 weeks to complete and involves many parties, information systems, and administrative steps.
Medicare beneficiaries not yet enrolled in Part D but subsequently qualifying for Medicaid experienced difficulties in obtaining Part D-covered drugs in their pharmacies, while new dual eligible beneficiaries (those Medicaid enrollees who became Medicare eligible because of age or disability) were automatically enrolled by CMS in PDPs prior to their attaining Medicare eligibility (U. S. General Accounting Office, 2007). According to King (2007):
“In addition, for the Medicare first, Medicaid second group of new dual eligible beneficiaries, CMS set the effective date of Part D coverage to coincide with the first date of their Medicaid eligibility. Under this policy, which was designed to provide drug coverage for dual eligible beneficiaries as soon as they attain dual eligible status, the start of their Part D coverage can be retroactively set to several months before the date of their actual PDP enrollment. We found that CMS did not fully implement or monitor the impact of this coverage date policy.
Although beneficiaries are entitled to reimbursement for covered drug costs incurred during this retroactive period, CMS and PDPs did not begin informing them of this right until March 2007. Also, CMS did not track Medicare payments made to PDPs to provide retroactive coverage or monitor PDPs’ reimbursements to beneficiaries for that time period. We estimate that in 2006, Medicare paid PDPs about $100 million for coverage during periods for which dual eligible beneficiaries may not have sought reimbursement for their drug costs. ”
In a news feature by Leslie Champlin (2006) for the American Academy of Family Physicians, not only patients but also physicians encountered problems with the new Medicare Part D program. According to Champlin (2006), the issue for physicians is that the Part D plans and formularies have been very difficult to access, with physicians being bombarded by calls from thousands of pharmacists after Part D took effect in January 1, 2006 to request substitute prescriptions for patients with plans that did not cover their medications, or that classified them in high-co-payment tiers, instead of low-income beneficiaries.
Particularly in the case of dual eligible beneficiaries, from low-income families previously enrolled in Medicaid, who were randomly assigned to plans under the new Medicare Plan D, physicians report that these dual eligibles were enrolled in plans without regard to their medications. These dual eligibles did not receive their plan’s formulary in the mail, and thus had no idea that their respective plans did not cover their medication.
Physicians then have to step up by providing the right medication or formulary that each patient requires. But although online services offer free formularies, their usefulness have been limited by PDA or computer memory capacity. The huge variety of Part D plans offered to patients may require a physician to download as many as 35 formularies, with many physicians having been unable to download all the formularies of the numerous plans that each of their patients may use.
As a result, a physician would have to download a formulary for each and every single patient (Champlin, 2006). Similar criticisms were likewise provided for in the Investopedia article by Jim McWhinney (2006), who points out that out of the approximately 7 million people eligible for the Part D coverage, only 661,000 were signed up by mid-December, according to the U. S. Social Security Administration. The author attributes the plan’s problems to one main reason: “the plan is far too complicated” (McWhinney, 2006).
McWhinney (2006) sums up Part D’s problems into the following: 1) there is too much research required of the beneficiary in selecting a plan; 2) there are too many choices of prescription drug coverage and prescription drug plans offered by companies; 3) there are too little coverage and too many changes (each plan has a formulary, or list of drug, which may change every year, with no guarantee that the drugs the patient needs being on the list); 4) there are too many expenses; and finally, 5) there are too many sharks (since Part D is so confusing, with so many decisions to be made, consultants and salesmen of all types have sprung up and taken advantage by selling expensive plans to the elderly