The new Medicare prescription-drug benefit plan is working extremely well – but for the wrong folks. Since January 1st, when the plan first took effect, insurance companies have been very busy signing folks up. There have been some clear winners and losers in connection with the new drug plan. The early winners include some of the nation’s largest health plans, which are busy peddling the drug coverage. The plans have signed up roughly 15 million new customers and in the process will get healthy government subsidies. Another set of the big winners are the drug makers, which have increased their wholesale prices since January 1st by about 12% across the board. There is another group – the pharmacy benefit managers – who will make a killing financially in their role.
The drug benefit, passed by Congress in 2003, is funded largely by the government, but offered to Medicare’s elderly and disabled beneficiaries by private health insurers. A standard package is written into law, but insurers design and market their plans with government approval. The various plans have different costs and cover different medications. It was sold as being the answer for seniors and others who would supposedly benefit under the new plan.
But not everyone is faring well under the plan. The losers include the independent pharmacists, who have really been hurt and are suffering cash-flow problems. Some say the plan will put many of them out of business. New government enrollment data show that, as of April 18, nearly 20 million people are enrolled in Medicare drug plans. Another 6.8 million are in retiree plans getting a subsidy for drugs from Medicare. More than 10 million Medicare beneficiaries have drug coverage from other sources, such as former employers and benefits programs for veterans and Native Americans. By far, the biggest winner in the race to sign up seniors is UnitedHealth Group Inc., which has gotten more than 3.9 million new customers. Humana Inc. and WellPoint Inc., come in a distant second and third. While 86 companies are offering drug plans, these three insurers combined have signed up roughly two-thirds of Medicare enrollees in the new drug-only plans, according to an analysis by Lehman Brothers. Close behind them are Caremark Rx Inc. and MemberHealth Inc., with more than one million enrollees each.
At this point, I would put the so-called beneficiaries, including seniors, as losers under the plan. Hopefully, that will change in time. I believe the overwhelming majority of people affected are totally confused and many were signed up for a plan that is totally wrong for them. Finally, the cost of this new drug plan will be much more than the Bush White House promised Congress it would be. You will recall their original numbers were badly off by design and now it appears that the costs will greatly exceed all projections. When you consider that the authority was taken away from the federal government to negotiate prices with the drug companies, you can figure out who the real winners and losers will be. Without a doubt, the American taxpayers have been taken to the cleaners once again!
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.