Saturday, March 13, 2010


The folks at Investors Business Daily wondered how Medicare would change if Obamacare becomes law. They interviewed Susan Berson of the Mintz Levin law firm in Washington, DC. She missed the first question, but managed to save most of the interview with later responses.

IBD: Let's start with the drug benefit known as Medicare Part D and the coverage void called the doughnut hole, where retirees pay full price for drugs.

Berson: Both the Senate and the House agree that the doughnut hole needs to be closed. That would be beneficial to retirees.
People in that doughnut hole can find it very difficult to afford their drugs. The Senate bill would reduce the out-of-pocket spending by creating a coverage gap discount program where seniors could buy drugs at lower cost.
The House bill would close the coverage gap over an eight-year period and provides for an initial discount in 2010-2011. As well, the administration wants to make generics more available. ... Industry agreements have extended the patent protection of branded drugs through minor changes in the formula or resulted in deals between branded pharma and generic makers that delayed generics from coming to market.

Closing the doughnut hole will only serve to make Part D plans more expensive for everyone, including those who use few or no medications. This is akin to other portions of Obamacare that require major medical insurers to offer coverage to anyone regardless of their existing medical conditions.

The effect of both of these provisions is an increase in premiums.

I also take issue with the comment that seniors can't afford their medications when they have to pay for them under the doughnut hole. Consider that Medicare Part D only came into existence in January, 2006 one has to ask what has happened in the last four years? Prior to 2006, seniors had to pay the full cost of their meds. With Part D they only pay a portion with the plan picking up the lion's share.

The rest of the answers listed in the linked Yahoo News article are on target.
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