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The Medicare Black Hole [Obamacare, Pt. 3]

Eight Pills A Day…

Everyone’s seen those day of the week pillboxes. One of your relatives may have one (or perhaps, a good friend of yours who is the same age and in good health—bewildering, what all the pills could possibly be. Vitamins? Vitamins for ETERNITY). Medication, in the 21stcentury, as a part of our daily life, comes in tiny capsules. As our years increase, so does our drug load. Your body decays, and an entire sector of the economy revolves around trying to maintain the bodily mobility and resiliency of our youth. In blunt terms, this is the process of medicating age.

The federal government’s program of Medicare provides support to senior citizens who no longer have (or never had) a cost-of-living income—specifically for, you guessed it, health care. As expected, adequate medical treatment for the elderly can be systemically extensive and preventatively expensive. During the implementation of this entitlement program, a number of stopgaps were put into place to prevent “blank-checking” all US seniors. One of these measures is what is known in political circles (and other, bakery inclined circles, I suppose) as the Medicare Donut Hole.

A quick run-down of how the Medicare system works before we get too tripped up on our own feet (here would be where a cheesy emergency room joke would go): the Medicare system has four parts. Part A covers hospital bills, and part B covers all other procedures. Both of these are funded in the form of a direct government subsidy (a large portion of Medicare tax siphons into these provisions. The giant pool of money that has the sole purpose of financing parts A&B is what is known as a single payer system; you’ll probably hear this paradigm bandied about when politicians (or your local, overly opinionated barfly) suggest alternatives to Obamacare). Part C is known as Medicare Advantage, in which the government provides a subsidy to buy a privately fronted healthcare plan (ring any bells?). Part D is the “prescription drug” portion—both for the single payer system and Medicare Advantage. Got it? Here we go.

Baby Boomers are to Social Security As Drugs are to Medicare

The pharmaceutical industry is large and it is powerful. The WHO estimates that the world market in pharmaceuticals is worth over $300 billion and is expected to rise to $400 billion in the next three years. Profit margins and ethical quandaries aside (look for a coming, probably vehement opinion), the cost of prescription drugs could have easily sunk a “fully-funded” Medicare model. Therefore, the original Medicare program had a gap between the amount of drugs the federal subsidy would cover and a so-called “catastrophic limit”. This upper end amount was a pressure gasket of sorts—if your drug bills hit this level in one year, all of your costs were covered. Think AIDS treatment or a multiple, smaller ailments (arthritis, hypertension and osteoporosis, for example).

A quick gedankenexperiment leads the logic inclined blog reader to realize that this gap is debilitating to those on subsidized health insurance. If they can’t pay premiums to begin with (although Wikipedia cites Medicare as covering only about half of medical expenses for  seniors), how would they be able to pay extra, recurring invoices for drugs? As a result, you’ve probably seen campaign ads touting “seniors using their social security to pay for prescription drugs” and other stories about people living in poverty to pay for life-giving pills. The truth is somewhere in the middle—occasionally seniors “save” the drugs (and the cost) by stretching the interval in between doses, or, in extreme cases, stop buying the medication altogether. Regardless, the current system makes for a very poor medical delivery paradigm. By providing only partial coverage, Medicare tends to encourage consequences like antibiotic resistance and the rebound effect, to name two specifically–as well as an increase in nursing home and assisted living enrollment.

…Keep the Hospital Bills and Super Bugs Away

While super bugs sound like small, Spiderman-inducing insects, they are not a joke. Ever heard of MDR-TB? Multi-drug resistant tuberculosis, also known as the pandemic that almost was1, is a direct result of antibiotic resistance. The ever-elusive quest for an AIDS cure stems from the fact that HIV has a nasty tendency to mutate and develop immunity to the anti-retroviral drugs currently on the market. Super bugs are a direct result of rapid evolution–adaptation to treatments that wipe out most, but not all, of a pathogen (especially in a world where everything is 99.9% anti-bacterial. Ever wonder what happens to that .1%?).2 So now it makes sense when your doctor (or mom, or irritatingly pretentious pre-med friend) tells you to finish all of your meds even if they go for a pretty penny on the college black market.

For those of you who couldn’t give a flying hoot about science (you should; shame, shame, shame), think about the fiscal ramifications. Incomplete drug treatment leads to increased health care cost from further doctor visits, operations, nursing home care, hospice–not to mention all of the federal money spent on researching new drugs to combat newly resistant strains of disease. Then think about the flip side—what about the seniors who inflate their cost to reach the catastrophic limit?

As Avik Roy acerbically analyzes in Forbes, the statistics surrounding Medicare Part D are incredibly confusing. He mentions that with the introduction of Medicare during the Bush Administration, private drug enrollment plans for seniors declined—hinting that there are free-riders on the system. However, his breakdown of Medicare enrollees provided seems murky at best. Taking a look at a graphic provided by the Kaiser Foundation (which was also included in Roy’s article—this one is just sans commentary), the facts are a lot clearer. The poverty level Medicare subsidy—third from the top—states that drug costs can go up to a bit over 6K. The national poverty level, as spelled out in the footnote, is around 10K. This same threshold of cost also applies to individuals with Medicare and Medicaid (top row). However, most importantly, the bottom row shows an “insurance plan” which really only applies to a specific subset of the population—and also requires the forethought and wherewithal to balance a budget to pay such a premium monthly. Also of note–bear with me, or at least get some tea and calm your nerves–Medicare enrollees in retirement homes pay nothing for prescription drugs.

 The Plan [B?]

Obamacare takes it upon itself to—albeit cryptically—close the Medicare Donut Hole through more comprehensive direct funding (being completely funded by 2020). One of the most biting commentaries on this decision, especially with recent exposés, is the propensity of drug companies to push substandardexpensive products. The direct counter to this is the formation of the IPAB, or Independent Payment Advisory Board. This bureaucratic body will analyze the workings of Medicare and the at-large health system to recommend cost cutting measures with a specific focus on prescription drugs–and whether certain drugs are appropriate to be funded by Medicare (this is the infamous “death panel” organization, which I think has been so thoroughly debunked that I’m not even going to touch it)3. So what? We’ve seen this before. Except, much like the Dent Law in The Dark Knight Rises (and with about as much explanation for the actual legal process behind said machinations), the IPAB has teeth. Its recommendations are binding unless Congress wants to directly overrule them—which, according to the document provided by the Congressional Research Service, would have to be rather timely. The chain of command goes from the IPAB to the Secretary of HHS for implementation of recommendations—unless Congress steps in quick enough to derail the report (which will no doubt vary directly with the amount of political glory seen to be able to be obtained from said intervention).

A lot of this seems like hand-wringing and what-ifs—and most of it is. Who do you trust, in this situation? Do you trust your cost-cutting measures to a new bureaucratic body4 made up of experts that CRS itself has pointed out have little incentive to stay besides civic duty? Or do you trust that most seniors will “make-do” with the system they’ve got, potentially becoming breeding grounds for mutated pathogens, some experiencing a quality of life which, really, defeats the entire purpose of Medicare to being with?5

Hello, rock. Meet Mr. Hard Place. And let the political point-pandering begin.6

 

Currently listening to: Internet Killed the Video Star – The Limosines. 

 _________

1That is, if not for a few forward thinking, brave scientists. An excellent book recommendation on this subject: Mountains Beyond Mountains: The Quest of Dr. Paul Farmer, A Man Who Would Cure the World by Tracy Kidder.

2The original Occupy movement.

3And if it hasn’t been sufficiently debunked, you should be able to tell from its description that this board does nothing more than recommend cost-cutting measure for Medicare. Theoretically, it could do something like decide anti-retrovirals aren’t worthy to be funded for seniors with AIDS (which would certainly accelerate death for those who couldn’t afford this pills out of pocket), but the question is–why? Also, at that point, you would hope that someone, anyone in Congress would step in. Regardless, this board does not weigh in on matters of direct or indirect capital punishment.

4With what I thought was exorbitantly generous salaries for just being “board members” but then I realized that outside employment and compensation was strictly prohibited in the bill’s statutes (which bring us to the problem of both recruitment and retention).

5Or perhaps we should meld these two plans formulated by some of the best policy minds from both sides of the aisle to create a plan that preserves the integrity of drug regimens while also reducing cost in a way that everyone is comfortable with. But where’s the fun in that?

6Political pandering aside, here’s my opinion because I can’t seem to post this without throwing my hat in the ring. I’m a proponent of closing the donut hole because I think it’s the most judicious solution—and I’m also a scientist, so I’m fairly biased in terms of medicinal integrity. As much as I tried to represent both sides of the argument here (which turned out to be harder with this one than any of the others), I cannot get the idea out of my head that 6K while hovering around the poverty line—or even 6K from a “retirement fund” annually—seems downright extortionary. I don’t pay that much for my total benefits.

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About Kyle

"I'm so enriched by my friends' political Facebook statuses and tweets!" said no one ever. So then we made a blog to continue said opinions over more that 140 characters. Op-eds, partisan-ship, unbiased reporting, pop culture, and book recommendations. Look at the headers, n00b.

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