Every other week during 2012 the Obama administration has put out -- possibly illegally -- a running total of how much money seniors in the Medicare Part D donut hole "saved" this year and last because of the drug-manufacturer discounts negotiated between President Obama and the drug manufacturers in 2009 as part of a sweet-heart back-room deal made in the White House. Every other week the Boston Globe has parroted the Obama propaganda by reporting on the Massachusetts portion of the "savings," claiming September 22 that Obamacare saved around 50,000 (plus or minus) Massachusetts seniors $610 on average1, out of the more than 1,000,000 seniors in Massachusetts.
What neither Obama nor the Globe want to tell you is that the real headline should be
"George Bush saved 550,000 Massachusetts seniors on Medicare Part D2 over $1 Billion"
since implementing Medicare Part D in 2006. Obviously anyone that falls into the donut hole is glad for the drug-manufacturer discounts negotiated by the White House; it's found money. But that's less than 10% of Massachusetts seniors. The real savings -- over a billion dollars so far since the Part D law was passed by the Republicans -- are for the 90% of us not affected by the donut hole at all and for the 1% with drug costs so high that our spending blows through the donut hole early in the year. Under Bush's Part D legislation, opposed then and now by the Democrats:
- Low-income seniors cannot fall into the donut hole at all and they also get free drug coverage and nominal co-pays.
- Those with drug expenses so high that they reach the donut hole quickly and move into the catastrophic-coverage level receive their drug regimen for about 10% of retail cost on the average when all three Part D categories (initial, donut hole, and catastrophic) are averaged together and all catastrophic-level recipients are averaged together
- The rest of us seniors, neither poor nor requiring a lot of drugs, use generic drugs and our spending does not begin to approach the donut hole threshhold; but -- thanks to President Bush -- we now get our prescriptions at about 25% of retail cost as opposed to paying full price before Part D was implemented in 2006 by the Republicans3.
Now here's the real bad news or good news depending on whether you are half-full or half-empty glass sort of person. Massachusetts seniors did not really "save" very much money at all because both before and after Part D was implemented in 2006, Massachusetts seniors had (and seniors in many other states had) a State Pharmaceutical Assistance Program (SPAP). Here are the details of the Massachusetts SPAP program for 2012:
This program's detail varies year to year and by income but in 2012 the maximum out of pocket prescription expense for someone in Massachusetts whose retirement income is between $34,033 and $45,390 is $2450. For those whose retirement income is between $45,390 and $75,650 in 2012 (what most of us retirees would consider high income), it's $3260. As the table illustrates, the number is zero for low income and low for those with incomes under $34,033. So in Massachusetts, the no-donut-hole concern covers people at middle income level as well and that has been the case since the late 1990s. The bad news in that, if you choose to look at it that way, is that you can't save the money Obama claims if you wouldn't have spent it anyways.
Only a very small number of Massachusetts seniors are so well off and have such a high retirement income that they do not qualify for the Massachusetts State Pharmaceutical Assistance Program. And then only a subset of that group have drug needs such that the donut hole affects them.
In summary, this news article is more Obama/Boston-Globe bullshit.
-- Dennis Byron
1 Oddly that's less than the $648 The Boston Globe said seniors had saved so far this year back in June when The Globe ran an earlier vesion of the same press release. How could we have "all" saved $648 in the first five months of the year but have only saved $610 in the first eight months? Which of you stupid seniors is sending their savings back to the drug companies?
2 Many seniors do not join Part D because they get prescription coverage through the Veterans' Administration or a former employer's retiree health plan; the roughly 25% of Medicare beneficiaries on Medicare Part C are usually but not always automatically enrolled into a Part D plan (they are counted in the 550,000 estimate).
3 I've been around the block a few times. There is no doubt in my mind that instituting the Medicare drug insurance plan raised drug prices -- and not just for seniors -- so part of what we are "saving" would not have been charged in the first place absent the legislation.