Quack, Quack

You have been sold down the river. So have we all.

We need to differentiate between healthcare reform and tinkering with health insurance. Yes, there is a difference. The entire burlesque these past few months has revolved around the tinkering.

A handful of congressmen offered HR 676, Medicare-For-All. That represents reform. All of the rest of our political entertainment has been farce and sleight of hand.

I will get to the parts that all of you younger folk are concerned about but first let me speak to one that is of more consequence to us geezers. That would be a part of the “secret deal” between al-PhRMA, the White House and Max Baucus – the do-nut hole.

I had the chance to do some more reading of the Senate version of healthcare. It really is quite interesting despite being written in a language no human has ever mastered.

For anyone unfamiliar with the do-nut hole, let me explain. Medicare Part D was a present from the Bush administration to the drug pushers and insurance companies. Not only was it unfunded, it costs the government more than any of the “reform” plans that came out of either house of Congress.

A senior has a choice of insurance plans covering most, not all, prescription drugs. In my case the choice was among 50-odd plans. You are required to pay premiums, deductibles and co-pays until you reach the hole. Once in the hole you pay 100%. Though you are still required to pay premiums, the insurer pays out nothing. It begins at $2,830 for 2010. As with everything connected to healthcare, there are substantial annual increases.

You can reach this amount fairly quickly because it includes all of the above items that you pay plus whatever the insurance company pays. However, getting out is just a bit different. The exit point is $4,550 but there is a catch. You arrive at that figure on your own. Payments made by the insurer are not included.

Now you must remember, this plan was not designed to benefit seniors. The government is forbidden to negotiate drug prices for Medicare. The VA is not so constrained and averages a discount of about 58%. This means that, having insurance, the drug dealers have more customers and they get the full retail price. That price is whatever they want it to be.

No, they didn’t forget the insurance companies. They are guaranteed against loss and receive subsidies from the taxpayer.

Now that you understand Part D, let’s see what the “secret deal” contains. It promises the drug dealers that Medicare will continue to be forbidden to negotiate. The drug dealers promise to help out with $80 billion, spread out over 10 years. Most of that will supposedly be going to reduce seniors’ costs in the do-nut hole.

To get that help, a 50% savings only while the senior is in the hole, you must buy brand names, no generics. Again, that is 50% of whatever the drug dealers want to charge.

Interestingly, al-PhRMA commissioned a study of what all of this will cost them. That study shows that, despite forking over $80 billion over a 10-year period, they will realize an increase of $137 billion in just the next 4 years. That, of course, is in addition to the windfall that Part D itself gave them.

They may have been too embarrassed to extend the study out any further, as a close reading of the plan shows that the do-nut hole will not be closed immediately. It will gradually be closed over a period of 13 years. Oh, lordy. They’re doing all of this for poor little me?

By the way, the Congressional Budget Office (CBO) tells us that there will be substantial increases in the premiums seniors will pay for their do-nut hole discount.

And, now we have just one more bit of information that might be of interest. While the drug dealers are generously offering a discount of $8 billion a year, they are raising prices. This year they have already raised the overall prices the greatest amount since 1992. That would work out to more than $10 billion already this year.

If that doesn’t sound bad enough, let’s look a little more closely. Since those $6,000 per dose drugs, and others up on the high end, are not being raised much, if at all, the bulk of the increases are on the most commonly used drugs. That makes the effect on most people even more pronounced.

The various plans that were developed had price tags from something over $800 billion to $1.1 trillion. That is tax money. That doesn’t count increased premiums, deductibles and co-pays. The government will pay the costs for those who can’t pay. They will subsidize small companies providing healthcare. They will also continue to subsidize the insurance companies. This is in addition to the subsidies represented by the present tax exemptions for health insurance benefits.

I have already covered many of the general problems of the various plans. While the elimination of bans for preexisting conditions is in the plans, there are ways for the insurance companies to circumvent that stricture.

Ms. Pelosi proclaimed the inclusion of the public option and spoke of the plan covering 35 million people. The impression was intentionally left that the public option would cover those 35 millions. Actually, that increase in coverage comes from requiring small businesses and some individuals to purchase coverage. The public option is estimated to be available to up to 6.5 million.

The public option will, therefore, not play the claimed role of competing with private plans so as to keep their prices down. The only potential positive that might come from the public option would be as a foot in the door. It might, only might, be a way of expanding its coverage at some point in the indeterminate future. Don’t hold your breath.

By mandating that more people buy insurance and not holding the companies’ price increases down, the industry will reap tremendously increased revenue and profits. Those will be born by the average Joe, by increases in premiums, deductibles and co-pays, as well as subsidies from the government, i.e., taxpayers.

Obama and the Congress took single-payer off of the table before the “negotiations” began. They gave the various parts of the medical industry places at the table while ignoring the public and the majority of physicians. Then they cowered and kow-towed before al-PhRMA, AHIP, the AHA and the AMA, which represents less than 20% of physicians and stands against the wishes of the majority of them.

I have difficulty comprehending how that can be described as change or leadership or reform. I am convinced that the better way is for the President to take charge, to declare the entire process and resulting mess a failure and to demand a new start based on Medicare-For-All. That would not just require leadership; it would actually be leadership.

Tagged as: aha, ahip, ama, bush, cbo, congress, do-nut hole, drugs, health care, healthcare, hr676, insurance, leadership, max baucus, medicare, part d, pelosi, phrma, prescription, public option, reform, senate, seniors, single payer, subsidize, taxpayer, va