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2003-12-29 -- More fine print in the phony Medicare Drug law.


"The drug benefit companies need cover only two drugs for each
"therapeutic class," or general illness, and could choose the lowest
cost or least effective drugs. ...Further, the companies themselves
could define the therapeutic classes, leaving room for interpretation.
For example, the plan providers could decide to define a certain
ailment or condition broadly, and would be required then to cover only
two drugs for that illness"


Boston Globe, 12/29/2003

Some sound alarm over drug law's fine print

By Susan Milligan, Globe Staff

WASHINGTON -- The 1,045-page Medicare bill, passed with only one day
of debate in the House and four in the Senate, is yielding some
surprises to seniors as they read the fine print, according to
lawmakers and advocates for senior citizens.

Among the concerns: Patients will not be guaranteed their desired
medications -- only drugs treating their general ailments. Insurers
can opt to drop a drug even after the patient is locked into a plan,
and need only alert seniors by posting the change on the Internet.
Some patients may have a choice only between one free-standing drug
plan and an HMO, and the costs could vary widely.

Now, some advocates for senior citizens fear that the highly complex
$396 billion prescription drug benefit -- heralded as a historic gift
to seniors when signed by President Bush three weeks ago -- will cause
more headaches than benefits when it goes into effect in January 2006.

William Novelli, executive director of AARP, the powerful seniors'
group that endorsed the bill, predicted Medicare patients would
ultimately warm to the package.

"You're not going to get perfect legislation out of this Congress --
what you're going to get is a compromise," he said. But he
acknowledged that a backlash was possible.

"I didn't anticipate the intensity of the counterattack," he said,
noting that 15,000 of AARP's 35 million members dropped out after the
organization backed the Medicare bill, though some have renewed.

On Friday, the National Annenberg Election Survey released a poll of
1,615 adults of all ages indicating that 63 percent support the
Medicare expansion in the abstract but the number dwindles to as low
as 21 percent when voters are presented with various criticisms of it.

Democratic lawmakers who opposed the bill say they are already
fielding anxious calls from elderly constituents complaining about
aspects of the plan. And advocacy groups like the National Committee
to Preserve Social Security and Medicare and the Alliance for Retired
Americans are working to change the law before it takes effect.

"We wanted a bill very much," said Barbara Kennelly, a former
Democratic member of Congress and president of the Committee to
Preserve Social Security and Medicare. But now, seniors "are getting
more and more upset" as they learn what's in the package, she said.

Under the new program, when a pharmaceutical company drops coverage
for a particular drug, the law requires that patients be put on notice
via the Internet, a vehicle Kennelly said is not much used by the
elderly.

And while the drug benefit is voluntary, patients will be penalized
with fees beyond the premium if they wait until they are older to
join. In addition, seniors will be barred from obtaining additional
drug coverage through "Medigap" plans, a popular supplement to
traditional Medicare.

These provisions are tucked inside a law that was negotiated largely
behind closed doors, with little opportunity for review. While
supporters point out that the issue of prescription drug coverage for
the elderly has been a part of the public debate for nearly a decade,
analysts and seniors' groups are only now digesting the nitty-gritty
provisions in the package that will determine how much choice seniors
will have over providers of prescription drug benefits and the
specific drugs patients want.

Most of the debate in Congress centered on bigger themes, such as the
role of private insurers in providing health care for the elderly.
Left undebated were the specifics of how the plan would work day to
day for American seniors.

Supporters of the package describe it as a first step, though
imperfect, toward easing seniors' escalating drug costs, and say many
of the restrictions are necessary to keep costs down and to help
insurers negotiate with drug manufacturers for lower prices. Seniors'
groups that supported the bill are planning ad campaigns to ease the
worries of Mecicare patients.

But critics are also planning ads, and are hoping to change some of
the rules they say could leave many elderly with inadequate coverage
or high fees.

For example, while the program is voluntary, some seniors may have
only two choices -- one freestanding plan for those who want to stay
in traditional Medicare, and one through an HMO, an option seniors
have historically not preferred. While patients eligible for Medicare
have the option now of joining an HMO, only 11 percent have done so.

The drug benefit companies need cover only two drugs for each
"therapeutic class," or general illness, and could choose the lowest
cost or least effective drugs. For example, a patient might desire the
popular cholesterol drug Lipitor, but a drug provider might decide
only to cover other, less expensive medicines.

Further, the companies themselves could define the therapeutic
classes, leaving room for interpretation. For example, the plan
providers could decide to define a certain ailment or condition
broadly, and would be required then to cover only two drugs for that
illness, according to the office of Senator Edward M. Kennedy, who
opposed the bill.

"The more that senior citizens learn about what is in the bill, the
more concerned they are. It's a sweetheart deal for insurance
companies, a bonanza for pharmaceutical firms, and a travesty for
senior citizens," said Kennedy, a Massachusetts Democrat. Kennedy
crafted an earlier version of the Medicare bill but attempted,
unsuccessfully, to filibuster the final bill.

When the permanent drug benefit takes effect in 2006, the federal
government will subsidize drug coverage by 75 percent for costs up to
$2,250, leaving patients to come up with the other 25 percent. But
insurers don't have to slash 75 percent off the cost of every drug
they cover; instead, they could require higher co-payments for certain
drugs and offer deeper discounts for cheaper medications.

Industry representatives say that offering preferred rates for certain
drugs is what enables them to negotiate discounts with drug
manufacturers. "The only leverage you have with drug manufacturers is
to say, `If you participate, I will prefer your drug. If you don't, I
won't,' " said an executive for a prescription-drug provider who asked
not to be named. "What any rational business would say is, `What do I
get in exchange?' " for featuring the drug, he said.

Posting changes on the Internet has particularly irked seniors'
advocates. "Our membership is pretty old, and a lot of them don't have
computers," Kennelly said. Many seniors would thus find out about a
change in drug coverage only when they went to the pharmacy to fill a
prescription.

Because the Internet is arguably not the most efficient way to
communicate changes in the drug plans to seniors, most insurers will
probably choose to notify affected patients by mail, said Phil Blando,
a spokesman for the Pharmaceutical Care Management Association, which
represents drug-benefit providers.

Leslie Norwalk, acting deputy administrator of the Centers for
Medicare and Medicaid Services, said she expects many of the details
to be worked out when the regulations for the law are written. For
example, while Kennedy's staff said the insurers themselves will be
given wide latitude to develop the therapeutic classes, Norwalk said
the government will probably set some guidelines.

Medigap plans will be prohibited under the new rules from offering
drug coverage to seniors, she said. The new benefit "is just much
better for seniors," she said, because it covers more. And while the
nation's current crop of seniors -- children of the Depression -- are
risk-averse and reluctant to move to HMOs, the next generation of
retirees is more accustomed to the managed care of HMOs and PPOs, and
more likely to consider them as an option, she said.

"Medicare is a fantastic program, but it has many, many shortcomings,
and many of those shortcomings are fixed by HMOs and PPOs," Norwalk
said.