Nancy Wittebort is 77, takes six medications each day and didn’t want to “tolerate” the hours-long hassle of figuring out which prescription-drug plan would get her the best deal.
The letter informing her that the monthly cost of her plan was going up about 60 percent Jan. 1 left her no choice.
“I thought that was too much of a jump,” said Wittebort, one of more than a half-million Coloradans receiving Medicare benefits.
Wittebort’s monthly premium would have rocketed to $43.30 — up from $26.40 last year and $18.40 three years ago, when prescription-drug plans became an option for Medicare recipients.
The Highlands Ranch woman dumped her insurance company and switched to one with a lower premium and a higher deductible before the Dec. 31 deadline, hoping the trade-off is worth it.
Many senior citizens — the ones who read warnings about increased premiums — began calling Medicare counseling centers weeks ago in an end-of-the-year scramble to switch drug plans.
Now, counselors expect another round of calls from irate and confused seniors as Social Security checks hit mailboxes and seniors realize deductions for drug plans are higher than they expected.
The monthly cost for prescription-drug plans has doubled and in some cases quadrupled since January 2006, when the program started. The 10 most popular plans across the country went up drastically this year, some by 70 percent and others by 200 percent.
“This is something that will catch the eye of policymakers,” said Lindsey Spindle, vice president of Avalere Health, a health-care information company in Washington, D.C. “I think there are years when those kinds of cost increases are simply unsustainable for the consumer, and I think we’re looking at one of them right now.”
“We did our best to try to make sure people were informed,” said Mike Fierberg, with the Centers for Medicare and Medicaid Services in Colorado. “The problem may come when the beneficiary does not read the information that was sent to them.”
Humana’s Michael Frost said his company’s rates have increased since the program began because they started out as the cheapest in the state.
“Humana has just come into the balance of where the marketplace is,” said Frost, market director of senior products for Colorado. “For the last three years, what we’ve done is given a pretty good deal.”
Insurance companies made their best guesses about what prescription-drug coverage would cost them after Congress allowed private companies to sell drug plans as part of the Medicare system. The federal government subsidizes companies that sell Medicare coverage.
Besides finding what is cost- effective, insurance companies say they have had to adjust for rising drug costs.
The basic plan, designed by Congress, covers 75 percent of prescription costs until the actual cost of drugs — not the out-of-pocket cost — reaches $2,700. After that, people start paying 100 percent of cost at the pharmacy (the “coverage gap,” sometimes called “the doughnut hole”). When the cost reaches the catastrophic level — $6,153 — insurance begins picking up 95 percent.
For Linda Engel, it’s not so much the price increases that make her furious but the annual befuddling mess of picking a plan for her 83-year-old mother.
“I’m a very intelligent woman. I’m a technical writer,” she said. “It was the most difficult thing I’ve ever had to do. Why every year do we have to go through this tremendous amount of work to figure this out?”
Seniors have to choose a prescription-drug plan at the end of each year, and the task is daunting, particularly for those who don’t research their options on the Internet. In Colorado, 22 insurance companies offer 53 drug plans for seniors on Medicare — all with varying premiums, co-pays and drug lists.
Engel said she spent dozens of hours arguing on the phone with her mother’s insurance company, in part because the rules of the plan were so convoluted, they kept getting charged for out-of-network care. The company once told her mother, who has Parkinson’s disease, to drive an hour away to get her broken finger X-rayed.
“We didn’t,” Engel said. “And now she has a crooked finger, and it hurts.”
Despite its flaws, having a government-funded drug plan beats the days when there wasn’t one, said Jane Barnes, manager of St. Anthony Central Hospital’s senior program.
In 2003, the same year Congress approved prescription- drug coverage for seniors, about one-third of older patients in St. Anthony’s emergency room were there because they didn’t take their medicine — some because they forgot but many because they couldn’t afford to fill their prescriptions.
That number has decreased considerably in the past few years, Barnes said.
“Some people had to choose between food and medication. We used to have all these stories about people eating cat food so they could afford their medicine,” she said. “We don’t hear that anymore.”