Prescription Drug Coverage Insurance Planning - Essay Example

Prescription Drug Coverage Insurance Planning Introduction: The cost of maintaining one’s health has grown by leaps and bounds with the advances in medical science and technology. Maintaining the health of the nation with particular emphasis on the economically weaker segments of populations and the segments of population that require increased healthcare services is one of the key functions of the government. In the United States of America national healthcare spending is estimated at $2.1 trillion (Part D Spend, Boosts Drug Access). To ameliorate the difficulties that the population would face in meeting the mounting healthcare costs, in different counties several disparate means are employed. In the United States of America medical insurance plans of Medicare and Medicaid mark the government initiatives towards reducing the burden of mounting health costs. A critical factor in the increasing healthcare costs is the growing prescription drug costs, which in 2006 grew by 8.5% and contributing $217 million to the national healthcare costs The increasing percentage of prescription drug sales is a reflection of the Medicare Prescription Drug Benefit - Part D that was introduced by the Federal authorities to start in 2006 and offer assistance in reducing the increased burden of cost of prescription drugs, thereby enhance the access to drugs for the people (Part D Spend, Boosts Drug Access). Medicare Prescription Drug Benefit - Part D: Increasing life spans have caused an enhancement in the percentage of the elderly in the population of the United States of America. The elderly form a segment of population with increased requirement for healthcare and prescription drugs given the diseases and conditions that are a part of the ageing process. The Medicare Prescription Drug Benefit – Part D is the initiative of the government to give relief to those over sixty-five years of age and the disabled in meeting the costs of their prescription drugs (Yin, et al, 2008). From January 1, 2006 onwards all the almost forty-three million Medicare beneficiaries were provided with access to prescription drug benefits that come from the stand-alone prescription drug plans (PDPs) or from Medicare prescription drug (MA-PD) plans. The Medicare drug benefit is on a voluntary basis and individuals have the right to opt to enroll or not in any of the plans offered. The plan offers a means for those without any former coverage for prescription drug benefits to avail of assistance towards the cost of their drugs, and for those with some form of coverage under Medicare health maintenance organizations, Medigap, or Medicaid, a replacement for their prescription drug coverage (Lichtenberg & Sun, 2007). The standard benefit design of Medicare Prescription Drug Benefit - Part D requires that the beneficiaries who pay a premium of about $24 per month, pay half of the initial $2,250 of the covered drug expenditures annually, after reducing a sum of $250. For covered drug expenditures between $2,250 and $5,100 the beneficiaries will have to pay the full amount of their drug expenses. In the case of expenses above $5,100 the payment to be made by the beneficiaries is five percent. A simple analysis of the standard plan shows that the payments to be made by the beneficiaries with drug expenses between $2,250 and $5,100 in what is known as the “doughnut hole” in common parlance, may hinder adherence to drug prescription regimens, leading to increased morbidity and mortality in these beneficiaries (Tija & Schwartz, 2006). By June 2006, of the estimated nearly forty-three million Medicare beneficiaries entitled to participate in Medicare Prescription Drug Benefit - Part D, 38.2 million had enrolled themselves had enrolled for one of the prescription drug coverage plans of Medicare Part D (PDPs), Medicare Advantage plans with prescription drug coverage (MA-PDs), the Medicare retiree drug subsidy (RDS), Federal retiree coverage, or with some other source that provided creditable coverage. (McLellan, 2006). Pros and Cons of Medicare Prescription Drug Benefit - Part D: The Medicare Prescription Drug Benefit – Part D is in essence a means to provide prescription drug coverage to the most vulnerable segment of the population in the form of the elderly and the disabled. An evaluation of the number of enrollees as a sign of this being a welcome gesture from this segment of population shows that this segment of the elderly and disabled has responded warmly to the gesture of the Government. The enhanced use of prescription drugs as a result of the support that the several plans provide is a good sign, as it means there is increased compliance with medication regimens among the elderly and the disabled. Medicare Prescription Drug Benefit – Part D thus has provided means to the elderly for regular access to prescription drugs and newer and more expensive prescription drugs that they avoided because they could not afford it. How does this translate into benefits for the elderly? An evaluation of the role of prescription drugs in assisting the elderly to face the challenges of the diseases and conditions that they are susceptible to. One such disease is the life-threatening disease of cancer. The Medicare Prescription Drug Benefit – Part D through its plans includes many of the cancer drugs including newly approved drugs. In doing so the range of cancer drugs that are covered by Medicare has been expanded then it was ever before. Thus another benefit that the elderly derive from the Medicare Prescription Drug Benefit – Part D is the range of medications available to them, including newly approved drugs that come into the market (Bowman, Rousseau, Silk & Harrison, 2006). There are several drawbacks with the Medicare Prescription Drug Benefit – Part D, which start from the enrollment stage. There are a wide range of plans and the elderly need to choose the right set of plans to really enjoy the benefits. This can be a confusing exercise for the elderly, where there also exists the possibility of poor cognizance. In addition many of the elderly are not computer literate, and choosing plans on the computer is not an easy task for them. This raises concerns that though the enrollment rate may be high there is the possibility of the elderly no enjoying the benefits in full by being in the wrong plans (Emerick, 2006). The second issue is the “doughnut hole’ in the benefits for the elderly. In the case of expenditure on drugs between $ 2,250 and $ 5,100, the elderly have to pay the full bill on drug expenditures. This is a deterrent for the elderly whose drug prescriptions bill fall within this range and hence there arises the possibility of them deterring enrollment in any prescription drug coverage plan. This scenario partially makes up for the twenty to twenty-five percent of the elderly, who have so far not enrolled in any plan under Medicare Prescription Drug Benefit – Part D (Heiss, McFadden & Winter, 2006). The Medicare Prescription Drug Benefit – Part D is a cost sharing coverage of prescription drug expenses that targets the uninsured in the United States of America. The uninsured have remained in this position because of the weak state of their financial capabilities and assets. The lower premiums of the plans may offer a means for these uninsured to buy some form of coverage, but the high out-of-pocket expenses could leave them exposed to costs that are beyond their means to meet. According to Jacobs and Claxton, (2008), “Paying premiums for a policy that exposes the uninsured to unaffordable medical bills may be viewed as an uneconomical use of their limited assets”. Yet another disadvantage lies in the increased administrative burden that the several plans or PDPs have brought with them. There is increasing complaints from health administrators and the al profession that the multiple PDPs with different sets of utilization management and formularies is putting a strain on them (Huskamp, Stevenson, Keating & Newhouse, 2008). Improving Medicare Prescription Drug Benefit - Part D: Any further financial support for healthcare will only increase the already hefty healthcare bill for the nation, putting a strain on the resources of the country. Hence any improvements for the Medicare Prescription Drug Benefit – Part D has to come from within its framework. There is a key element that offers the means to improvement without any increase in the financial support being provided for providing insurance coverage for all the people. The cost of drugs is a critical element in any prescription drug benefits. Given that there is already a large use of prescription drugs, which is only going to grow with the insurance coverage, the government needs to negotiate with he drug companies to lower the cost of prescription drugs used within the PDPs. Any percentage drop in the cost of the drugs reduces the financial strain on the beneficiaries and the government (Prescription Drugs: An Overview of Approaches to Negotiate Drug Prices Used by Other Countries and U.S. Private Payers and Federal Programs). Should the government make the same plan mandatory for employers to offer their employees, the response for this type of drug coverage would be high given that the premiums are lower. Literary References Bowman, J., Rousseau, A., Silk, D. & Harrison, C. (2006). Access to Cancer Drugs In Medicare Part D: Formulary Placement and Beneficiary Cost Sharing In 2006. Health Affairs, 25(5), 1240. Emerick, T. (2006). Part D: Rx for Disaster. Retrieved April 23, 2008, from, ePluribus Media Web Site: http://www.epluribusmedia.org/archives/features/2006/0511part_d.html Heiss, F., McFadden, D. & Winter, J. (2006). Who Failed To Enroll In Medicare Part D, And Why? Early Results. Retrieved April 23, 2008, from, Health Affairs Web Site: http://content.healthaffairs.org/cgi/content/full/hlthaff.25.w344v1/DC1 Huskamp, A. H., Stevenson, G. D., Keating, L. N. & Newhouse, P. J. (2008). Rejections Of Drug Claims For Nursing Home Residents Under Medicare Part D. Health Affairs, 27(2), 560-567. Jacobs, D. P. & Claxton, G. (2008). Comparing The Assets Of Uninsured Households To Cost Sharing Under High-Deductible Health Plans. Health Affairs, 27(3), 214-221. Lichtenberg, R. F. & Sun, X. S. (2007). The Impact of Medicare Part D on Prescription Drug Use by the Elderly. Health Affairs, 26(6), 1735-1744. McLellan, B. M. (2006). Testimony. Retrieved April 23, 2008, from, United States Department of Health & Human Services Web Site: http://www.hhs.gov/asl/testify/t060614b.html Part D Spend, Boosts Drug Access. Pharmaceutical Executive, 28(2), 20. Prescription Drugs: An Overview of Approaches to Negotiate Drug Prices Used by Other Countries and U.S. Private Payers and Federal Programs. Medical Benefits, 24(5), 12. Tija, J. & Schwartz, J.S. Will the Medicare Prescription Drug Benefit Eliminate Cost Barriers for Older Adults with Diabetes Mellitus? Journal of the American Geriatrics Society, 54(4), 606-612. Yin, W., Basu, A., Zhang, J. X., Rabbani, A., Meltzer, D. O. & Alexander, G. C. (2008). The effect of the Medicare Part D prescription benefit on drug utilization and expenditures. Annals of internal medicine, 148(3), 169-177. Read More