You’ll be hearing a lot in the coming months about how we should trust the marketplace – ie, big insurance companies – more than our own government to provide us affordable health coverage. And how our leaders shouldn’t offer us the choice of a publicly run insurance plan in addition to private insurance options.

But a new study from the Kaiser Family Foundation finds that when insurance companies are allowed to run the show – as they now do in providing seniors a prescription drug benefit through Medicare Part D –seniors and taxpayers end up spending too much.

(A bit of background: When Congress agreed to give seniors Medicare drug coverage in 2003, it expressly forbid Medicare from offering its own plan, or negotiating to get lower drug prices, even though taxpayer money funds the program. Rather, it let private insurance companies -- who lobbied hard to keep government out of the way -- offer drug insurance to seniors, claiming that choice and competition would bring down costs.)

Kaiser found most seniors enrolled in these private insurance plans spent an average of $360 to $520 more on their prescription drugs in 2006 than they would have if they had chosen the lowest-cost plan available. Some spent as much as $1,360 more. As researchers noted, seniors wanted to save money -- 72 percent reported that the cost for each prescription was a very important factor in picking a drug plan. But they didn’t end up getting the lowest price, and worse, paid too much.

As Consumers Union has found, many of these private insurance plans offer a sort of ‘bait and switch,’ promoting low costs for drugs during the open enrollment period, but then hiking prices once seniors pick a plan and are locked in for a year.

The Kaiser study also notes that seniors were overwhelmed by too many plans to choose from. In 2006, the typical county in the nation had 48 plans, while some had more than 70 choices. Kaiser reports that nearly three-fourths of seniors felt that the drug benefit was too complicated, and when asked if they’d prefer Medicare picking a handful of plans with certain standards so seniors would have an easier time choosing, 60 percent agreed.

“The unprecedented privatization of a public insurance function embedded in the Medicare Part D program provides an excellent opportunity to understand how well individuals handle choice in their public insurance options. The results presented here suggest that the answer is “not very well” in terms of maximizing savings to the consumer; most seniors in this analysis did not choose the lowest-cost Part D plan available to them in 2006,” the Kaiser report finds.

Not only did seniors choose plans that cost them – and taxpayers -- more, most tend to stick with the same insurance plan because shopping and switching is too confusing. Insurance companies count on that to keep their profits up.

Since letting private insurance companies run the show, many members of Congress have tried – unsuccessfully – to let Medicare offer a drug coverage plan. Or at least to negotiate lower drug prices, which a Congressional study found could save taxpayers $61 billion over a decade. But the powerful insurance and drug company lobby have made sure those efforts have gone nowhere.

As our leaders tackle health reform this year and try to get us more affordable health insurance and more dependable coverage, let’s hope they pay more attention to the costly lessons learned from the privatization of the Medicare drug benefit than the insurance industry scare tactics against allowing our government to offer its own choice of health coverage.

comments (3)

what we really need is torte reform.

just wait until the federal beaurocrats make YOUR health care decisions. all the compassion of the IRS with the efficiency of the motor vehicle administration. talk to people in the uk and canada and europe. universal health care will ruin our system- which is not perfect but is still the best system in the world. govt control will make it so much worse!!!

and you do know that congress passed the foundation for RATIONING health care in the last "stimulus" package, following tom daschle's blueprint: reform won't stand public scrutiny so get it done by hiding it in spending/budget bills. DONE! congratulations, america! change and transparency- hardly! get ready for the waiting found elsewhere in the world, and lack of new treatments for conditions like breast cancer -just like the effective breat cancer drugs just banned in england because they cost too much.

universal care will be a disaster. what we really need is torte reform and free markets!

Congress recently approved $1.1 billion in the stimulus package to fund more comparative research so patients and doctors can know just how well medications stack up against each other, as well as other treatments and surgeries. It is important to note that the federal government has funded this type of research for years; the stimulus just adds more funding so more types of treatments can be studied. It also important to note that the funding does not look at what treatments or drugs cost, or proposes any sort of control over how those treatments are delivered by health care providers.

Right now, when a drug or medical device is approved for market, the companies don’t have to show that it works any better than other drugs already being sold. Rather, the drug only has to work better than a placebo, or sugar pill. Also, it is the drug companies themselves that conduct these studies, not independent researchers, and the companies often downplay or hide studies that show their products perform poorly. Just see the A-1 story in today’s (March 18) Washington Post on how one company buried negative safety studies about its anti-psychotic drug.

Comparative effectiveness research like that funded in the stimulus will look at how well drugs and treatments already on the market compare against each other – giving your doctor real science-based information when he’s prescribing; not just drug-industrymarketing. These studies also will be independent; giving you and your doctor an unbiased picture of what are the most effective treatments available.

I know about the "bait and switch" and Humana is notorious for this nonsense. They told me they would cover certian drugs then a few months into the year they come to some genius decision to not cover the drug that was my sole reason for choosing Humana. They do this with their medical insurance also. They told me that my Nurse practitioner was covered under their plan. A few months later I went to see my nurse and they not only denied the claim saying she was not a "preferred provider" they added insult to injury and said she was a specialist there for they would not cover her without a referral and without me paying the copay of a specialist. A regular doctor visit should have left me with a $10. copay instead they said i had to pay a $30.00 copay and get a referral....from who i asked the idiots and they said from a General practitioner, i then asked them what do you think she is, a heart surgeron, for God sakes she is a N.P she cant specialize in anything you idiots. when i bought the policy i had the sales rep and her manager come to my home and they assured me that she would be a covered provider they evan made a few phone calls to verify. When i got the denial in the mail i called these two idiots and suddenly neither had the time for me nor would they help me...and when i talked to the secretary there she was a total jerk. I complained to Humanas complaint dept with nothing happening in my favor they stood by their dishonest ways. I complained to the state statin i had been mislead and they did not honor their end of the agreement. And being i live in a third world country they call a state, Lousyana of course they did nothing to help me. This state is just as bad as the insurance company. Dishonest. I told the state how could they consider her a specialist when she is clearly not a specialist and to think and say she is, is just the most ignorant thing i ever heard of. Well I told humana if they could not handle a simple claim like this then they surely would not be able to handle or be honest on a big claim so i canceled my policy and made sure they could no longer deduct from my checking account monthly. After I cancelled guess who finally called me being very nice? You got it the sales rep and her manager... I told them in my most rudest manner i did not want their garbage snd they were a bit to late to call me back and they could kiss my backside...not the term i used but use your mind on that. And i hung up on them. I kept the RX part because it was being decent but over the last two years they have gone to hell and i am cancelling them this year and am looking for another plan. On top of them denying or harrassing me on Rx's my doctor writes and HE THINKS i need they have some sort of power trip and love to say no...and on top of that insult they are raising my $6.00 copay to $30. copay per script. So that is the last straw with Humana for me... they suck they reall do suck. I advise no one to get Humana. the only thing good about Humana is ___________.

(yeah wow i couldnt think of one good thing about them so that was left blank on purpose)

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