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Health Debate Turns to Medicare

September 25th, 2009 – President Obama long ago painted a big red target on the Medicare Advantage plans that he accuses of being wasteful and creating a windfall for insurance companies while delivering little value to consumers.

Now, Senate Finance Committee Chairman Max Baucus is proposing to cut more than $100 billion over 10 years from Medicare Advantage plans to free up money to cover the uninsured. Sometimes called Medicare Part C, Medicare Advantage plans cover about 10 million Americans, including many here in Colorado.

Humana was recently reprimanded by the government for informing its Medicare Advantage clients that their program was under threat.   Humana’s actions caught the attention of Centers for Medicare and Medicaid Services (CMS).  Because Humana receives federal monies to operate Medicare Advantage and must comply with federal law when sending official communications about the Medicare CMS was able to shut down this campaign by Humana which was called informational or propaganda, depending on which side of the fence you are on.

Not all Democrats are on board with cutting the Medicare Advantage plans, as they are very well run in a number of states. Of course, we’ll have to wait and see what the final outcome is after all the politicians’ horse trading is wrapped up.

The drug industry got to the table early and pledged $80 billion in savings over 10 years, including a 50 percent discount for seniors who fall into the “doughnut hole” coverage gap. This compromise came at the expense of everyone else and economists expect that the concessions won by Big Pharma will net them a positive gain even with the $80 billion program. However, while the Medciare Part D Plan was a huge government giveaway to Big Pharma, something must be done to help seniors with the drug costs from the Medicare Part D doughnut whole.

How the doughnut whole works is once a senior reaches $2,700 in total drug costs, they will be in the “donut hole” and must pay the full cost of prescription drugs until their total out-of-pocket cost reaches $4,350. This annual out-of-pocket spending amount includes yearly deductible and copay amounts.

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