Medicare Part D - Pricey Drugs Overwhelm Medicare Safeguard


I read this interesting Associated Press article by Ricardo Alonso-Zaldivar on ABCnews.go.com and thought I would share. Click on web link below to read article. 

After reading the entire article, you determine for yourselves whether many of these prescription drug companies are just in it for the maximum profit no matter what and don’t really care about the consequences of the end users.

Below are some excerpts from the article:

  • The cost of Medicare's "catastrophic" prescription coverage jumped by 85 percent in three years, from $27.7 billion in 2013 to $51.3 billion in 2015, according to the program's number-crunching Office of the Actuary.1

  • Medicare's catastrophic coverage was originally designed to protect seniors with multiple chronic conditions from the cumulatively high costs of taking many different pills. Beneficiaries pay 5 percent after they have spent $4,850 of their own money. With some drugs now costing more than $1,000 per pill, that threshold can be crossed quickly.1

  • Lawmakers who created Part D in 2003 also hoped added protection would entice insurers to participate in the program. Medicare pays 80 percent of the cost of drugs above a catastrophic threshold that combines spending by the beneficiary and the insurer. That means taxpayers, not insurers, bear the exposure for the most expensive patients.1

  • Catastrophic spending accounts for a fast-growing share of Medicare's drug costs, which totaled nearly $137 billion in 2015. The catastrophic share was 37 percent, yet only about 9 percent of beneficiaries reached the threshold for such costs. For those patients, average spending jumped by 46 percent, from $9,666 in 2013 to $14,100 in 2015.1

  • "If the numbers continue to increase like this each year, I worry about how much the taxpayers could afford," said Sen. Grassley, who plans to ask Medicare for explanations.1

  • Catastrophic coverage will soon cost as much as the entire prescription program did when it launched, said Sen. Ron Wyden, D-Ore. "Congress can't continue to stand idle.”1

  • Experts say the rapid rise in spending for pricey drugs threatens to make the popular prescription benefit financially unsustainable.1

  • Nonpartisan congressional advisers at the Medicare Payment Advisory Commission have called for an overhaul. The presidential candidates, as well as the Obama administration, have proposed giving Medicare legal authority to negotiate prices.1

  • "The incentive is to price it as high as they can," said Jim Yocum, senior vice president of Connecture, Inc., a company that tracks drug prices. Medicare is barred from negotiating prices, "so you max out your pricing and most of that risk is covered by the federal government.1


To read the entire article click on the link below:

http://abcnews.go.com/Health/wireStory/ap-exclusive-pricey-drugs-overwhelm-medicare-safeguard-40846624

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1. Source: Associated Press article by Ricardo Alonso-Zaldivar on ABCnews.go.com
http://abcnews.go.com/Health/wireStory/ap-exclusive-pricey-drugs-overwhelm-medicare-safeguard-40846624