The Medicare/Medicaid Fiasco

This is the last of three installments in a series.  The other two, Healthcare Programs Need Immunization and The Bad Old Days ran here on NQ within the last week or so.  The opinions expressed here are strictly my own, drawn from my own experiences and research.  If I got any facts wrong, feel free to correct me.  I know… like you’d hesitate!

George W. Bush seems to have always had a thing for Medicare.  I don’t know why he can’t seem to leave it alone.  Sure, it needs fixing, along with Medicaid and Social Security.  But it’s too important to people’s everyday lives to be monkeying around with it  – and worse, using it as a tool to shovel government money into the insatiable mouths of insurance and pharmaceutical conglomerates. 

I lay the blame for the problems described in this article completely on him.  It was his doing.  Just add it to his list of blunders.

Medicare began offering a Prescription Drug Benefit in early 2004, called Medicare Part D.  GW Bush signed it into law in December of 2003.  One month later, it was revealed that the bill would cost around $139 Billion more annually than White House estimates during Congressional debate on the program.  There is evidence that this budget discrepancy was deliberately hidden, in order to get the votes of fiscal conservatives.

The actual benefit didn’t start until 2006, but in 2004, Medicare rolled out a phase-in of the benefit.  They needed an ocean of temporary customer service reps to absorb the tsunami of calls.  I was one of thousands of temps who were hired to provide “Beneficiary Assistance.”  They hired us by the hundreds each week, put us through a 2-day cram training class, and turned us loose on the phones.  More on that in a bit.

A Little Background:

The two most expensive programs that states administer are Education at #1, and Medicaid at #2.  Medicaid is for people with low incomes, of any age.  It used to be fairly easy to qualify for it, but as medical costs rose, the income ceiling to qualify rose with them.  Medicaid is fraught with abuse, thus making it almost as wasteful as it is beneficial, as entitlement programs go.

Medicaid varies a lot from one state to another in what it covers and who qualifies for it.  States with a lot of money, like California, have generous Medicaid benefits.  Poor states, like Mississippi, not so much.  They also vary in what they cover.  Prescription drugs are the biggest medical expense for most people, and that coverage also varies from state to state.

By contrast, Medicare is a health insurance program for the elderly and disabled, with low-cost premiums and co-pays.  Low income people can often get assistance from their state programs if they can’t afford to pay.  Those with low income who also qualify for Medicare due to age or disability are called “Dual Qualifiers.” 

Ooh, it almost sounds like a good thing, doesn’t it? 

“Woohoo!  Look at me!  I’m a Dual Qualifier!”

In 2003, there was a wave of reform fever going around in the state and federal governments, aiming to reel in these expensive entitlement programs.  But there were also a lot of calls for more assistance, especially for the elderly.  In Washington, Congress debated cutting benefits for Medicaid, but the states rightfully howled in protest.  Nobody wanted to cut benefits, but they didn’t want to raise taxes to keep up with the rising medical costs. 

Therefore, Congress decided to divide the pie a little differently.  By adding a prescription benefit to Medicare, they were able to take some of the burden of eldercare off the states.  They took the money to pay for it from Medicaid.  Oh, they didn’t phrase it like that publicly, but that’s what we were told in training. 

The sales pitch to the public was this:

“The elderly will now be able to buy this new inexpensive Prescription Drug Benefit through Medicare!  This will save taxpayers a lot of money by reducing Medicaid funding!”

State legislatures across the country saw it as an opportunity to slash Medicaid, thus avoiding having to risk their political careers by voting for tax increases.  They could say, “We’re taking care of our elderly first, through Medicare’s Prescription Drug Program, so only the Welfare cheats will be affected by decreasing Medicaid funding.” 

Some states lowered the Medicaid income limit to below the poverty line.  Some dropped prescription coverage completely!

Shortly after I started working for Medicare, 13,000 people in Mississippi, including the elderly and disabled, got letters informing them they no longer had prescription drug coverage under Medicaid.  They were advised to call Medicare to sign up for the prescription drug discount cards. 

During the first two years, as they rolled out this new benefit, it was chaotic for everybody involved:  beneficiaries, pharmacies, organizations that help the elderly, and even for Medicare employees. 

This phase-in period was poorly designed, poorly funded, and poorly executed.  Hundreds of thousands of elderly and disabled people suddenly lost access to their  prescription medications, due to loss of Medicaid coverage.  They couldn’t afford them anymore.

In those first two years, Medicare’s plan provided a mere $600 annual credit, and only to very low-income people, to replace their Medicaid coverage. 

Whereas they had been getting prescriptions filled for a co-pay of about $10 a drug under Medicaid, they now got a piffling average of 10-15% off the retail prices.  Many had $500 a month in prescription needs, and lived on less than $1000 a month from Social Security.  It wasn’t just in Mississippi.  I got calls like these from all over the country.

The Prescription Drug Discount Plan offered through Medicare is one of the most confusing programs ever launched by the government – kind of like the Tax Code.  Here’s the gist of it:

The benefit is offered in conjunction with private-sector companies that sell “discount card” plans and are reimbursed by Medicare.  Plans have an annual fee and/or monthly premiums, along with deductibles and co-pays.

The discount cards are administered by over 50 different companies in any given area, comprised of partnerships formed between insurance companies, drug manufacturers, medical providers, and pharmacies. 

According to Wikipedia, “As of 2008 there were 1,824 stand-alone Part D plans available. The number of available plans varied by region.”

Each partnership is free to set its own prices.  Since the discount package they offer is their primary selling point, the idea is that they will be competitive and economical — but like any commercial market, that sea is full of sharks. 

When beneficiaries enroll in one of these prescription plans, they cannot switch until the end of the year!!  That’s still the way it is.

From the beginning, it was clear who was benefitting most from this new benefit.  The Discount Plan partnerships. 

What we were trained to do was to take calls from beneficiaries, and ask them to tell us in detail all of the prescription medications they were taking, including dosages and how many pills per month.  Then we would use our internal Internet to wade through the various discount plans, with the help of built-in search engines (thankfully!), and give them the choice of at least three plans. 

We couldn’t tell them outright which plan was the cheapest or the best for them; we had to give them three choices to pick from.  The price differences from the best to the third-best could be dramatic, but we couldn’t “show favoritism.”

We would give them the names and contact information for the three plans, and tell them they needed to call each one and compare prices.  Many of these people were barely able to cope with the one phone call to Medicare, let alone calling three insurance companies, and then making wise choices. 

Many of them would begin weeping as the call progressed, as the reality set in that they would no longer have their prescription medications because they could no longer afford them.

After two months, they gave me the option to become a permanent employee of Medicare.  It only took me my lunch hour to decide against it.  Why?  I have a heart, and it was getting broken daily, to the point that I would drive home from work fighting back tears. 

I had to listen to caller after caller tell me all their miseries, their medical histories, their financial details, and their doctor’s orders — and all I could do was steer them to businesses that would offer them savings of about 10-15% off retail, knowing in my heart that prices would likely increase by 20% in the next year.  I just couldn’t handle it.

Epilogue

Although I’ve presented this story in the past tense, know this:  it’s still basically the same.  The Medicare Prescription Drug Plan has stabilized somewhat, and it’s more affordable now, but it’s still a mess. 

Only the most impoverished can qualify for Medicaid now, which is why so many elderly people allow themselves to go broke, so they can get Medicaid to pay for their old-age needs.  Most of us will have to figure out the Medicare Maze before too long.  Some of us are already there.  Woe is us.

We’ve heard a lot of political campaign talk about Universal Health Insurance for America this year.  Please don’t bet on it coming to pass in our lifetimes.  I’m not saying that to be cynical — I’m strongly urging you to hang on to any insurance you have, unless or until you can get something better without a gap in coverage.  It only takes one illness or accident to wipe out a family’s finances, even with insurance.  Without insurance, it can be devastating. 

Insurance may cost an arm and a leg, but there are diabetics who will actually lose limbs due to inadequate health care caused by lack of insurance coverage.  Women who can’t afford expensive preventive drugs like Fosomax will risk osteoporosis.  Stoical men will forego check-ups altogether, letting treatable prostate cancer go undetected until it’s too late.

Because cowardly politicians are afraid of losing their jobs, they will avoid voting for tax increases, even in the best of times.  It’s going to be a long time before the current financial crisis allows us to have a healthy debate about Universal Health Insurance in America.  If it ever comes, it won’t be cheap.  The tax burden will be heavy. 

Finally, I beg of you, if you care about the Universal Health Insurance that first brought Hillary Clinton to the world stage, don’t let her “our” dream die without a fight.  She tried to get it for us in 1993.  She tried to make it her primary platform in 2008.  I hope she keeps trying.  At this point, I don’t even care who gets credit for it, if it comes to pass.

As for myself, I now have a good job and good insurance, but I often think of The Beatles song title, “Tomorrow Never Knows.”

A few related links:

http://www.investopedia.com/articles/06/MedicarePartD.asp?Page=1 

http://en.wikipedia.org/wiki/Medicare_Part_D

http://www.medicare.gov/pdphome.asp