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Letters |
Improve Treatment Of Dual Eligibles
The lack of reporting requirements for Medicare prescription drug plans makes evaluating their success difficult. Richard Frank and Joseph Newhouse (Jan/Feb 08) use creative techniques to provide tantalizing information on the likely impact of the Medicare drug benefit on the costs of prescription drugs, raising doubts about its success on this dimension. They offer particularly convincing information on the population covered by both Medicare and Medicaid (dual eligibles) who used to get drug coverage through Medicaid. Frank and Newhouse found evidence of about an 8 percent increase in the costs of the drugs this group uses over what Medicaid was paying, unnecessarily raising the costs of the program. Applying this statistic to the costs for the 6.2 million dual eligibles suggests that government costs were $1.4 billion higher in 2006 than if these people had been covered by Medicaid.1
This is a key finding, as the drug benefit has not served these beneficiaries well. Dual eligibles are required to enroll in one of the less expensive private plans or be auto-enrolled by the program if they fail to do so. Not all plans offer the drugs these beneficiaries need, and many have had to shift plans from year to year, creating confusion and disruption in services for the sickest and frailest portion of Medicare beneficiaries.
Frank and Newhouse offer a solution that would leave dual eligibles in these plans. Other options should also be considered. What about returning these beneficiaries to Medicaid? In many ways, they were often better off under that system. The biggest gainers from this aspect of the drug benefit are the pharmaceutical companies that are now reaping the advantages of providing drugs at higher prices. The alternative I favor would create a government fallback plan into which Medicaid recipients would be enrolled, which would be available to any other Medicare beneficiaries as well.2
American Institutes for Research, Silver Spring, Maryland
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- Author’s calculation from Board of Trustees, 2007 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds (Washington: U.S. Government Printing Office, 2007).
- R. Lopert and M. Moon, "Toward a Rational, Value-Based Drug Benefit for Medicare," Health Affairs 26, no. 6 (2007): 1666–1673.
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