The XX Factor

Medicare Sticker Shock, in Mailboxes Now

Millions of voters and Medicare recipients, my dad among them, are opening their mail this month and discovering that to pay their Medicare prescription drug premiums next year, they’ll need to open their checkbooks. In September, Avalere Health, a private research firm, released the results of a study attempting to quantify the effect of a new requirement that Medicare gradually begin offering coverage in the famed “donut hole” (which resulted in seniors whose prescription drug costs surpassed a set coverage limit having to pay all of the costs of those drugs out-of-pocket until reaching a catastrophic coverage threshold).  Overall, premiums will be up.

Benefits increase as well, but seniors who don’t have an immediate need for the additional coverage are more focused on their wallets than on abstract future gains, and recent poll results show that most seniors don’t realize that the health care reform law passed earlier this year will eventually close the “donut hole.” That finding suggests that many people won’t know why their premiums have increased. Medicare officials point out that for many seniors, changing plans based on their specific prescription needs can lead to lower premiums, but anyone with any experience at all in attempting to shop for health insurance knows that’s far easier said than done. Those same officials, who’ve been forecasting an average increase of $1 in premium charges, admit that their estimate is based on an assumption that every senior will switch to the lowest-cost plan that covers their current drug needs. In other worlds, in a perfect world of educated consumers, this one’s win-win. In the actual world, probably not so much.

From an individual point of view, the new drug premiums are yet another complicated homework assignment within a byzantine structure of government and private insurers all with differing reimbursements and exceptions for different prescription drugs. On a larger level, it’s one more indicator that the often unclear and vastly complex health care overhaul has left its supposed beneficiaries more dazed and confused than grateful, and obviously infuriated many. One line in the new premium announcement stands out for conservative voters in particular: a suggestion that Medicare Part D recipients will pay higher premiums based on income. Seniors, who for decades have paid into Medicare with no limit on Medicare-taxable income, are particularly angered to see limits being placed on what they can now get out of the program.

I mention my dad in the first line of this post because he discovered yesterday that his premium (and my mother’s) will more than double next year, from $25 a month up to $60. Each. Sure, he may be able to lower it by shopping around, and he may eventually see a benefit from a closed “donut hole,” but I know one thing he’s going to do first: vote.