Senior citizens are getting slammed. Just when their retirement savings are being affected by the Wall Street boondoggle, they will have to pay more for Medicare drug coverage in 2009.
Here’s a quick refresher on the Part D Medicare prescription drug plan. In 2005, politicians reacted to growing outrage from older citizens. These voters were fed up with skyrocketing medication prices and demanded relief. The response was Part D of Medicare, which launched in January of 2006. There were penalties for older people who failed to select a plan from one of the competing insurers, so most signed up.
In the beginning people were pleased. After the initial $250 deductible was paid, the government picked up 75 percent of prescription drug costs up to $2,250. For people with modest medication needs, this was a real blessing.
But those who needed more medicine fell into the dreaded donut hole. This often happened around August or September. A bottle of pills that cost $30 in March might cost $120 or more by October.
In addition to their monthly insurance premiums, seniors in the hole had to pay 100 percent of their prescription drug costs until the total outlay for the year reached $5,100. If their bills exceeded that amount, they emerged from the donut hole and 95 percent of their drug costs were paid by the government until the whole process started again in January of the next year.
If that sounds complicated, it is. Pharmaceutical manufacturers love Medicare Part D because it has boosted revenues. The government caved in to drug companies’ demands not to negotiate prices, so patients and taxpayers pay full price.
Now premium prices are rising again. According to government analysts, the average insurance premium for Part D will go up about 24 percent, from roughly $30 a month to $37. On top of rising prescription prices, this will take a bite out of a fixed income.
One reader asked for help: “My husband reached the donut hole by June taking both Elmiron and Flomax for interstitial cystitis. Elmiron costs $960 for a three-month supply. It is the only specific drug for this condition. Is there a legitimate pharmacy outside this country where I can purchase these medications more affordably?”
Not surprisingly, many seniors look for more affordable ways to buy their prescription medicines once they hit the donut hole. Buying Elmiron from a legitimate online Canadian drugstore could cost around $500 for a three-month supply. That’s a significant savings.
We offer some guidelines to finding legitimate online pharmacies in our Guide to Saving Money on Medicine. The only trouble with this approach is that any medicines purchased outside the country do not count towards getting out of the donut hole. If total drug costs will exceed $5,726.25 in 2008, it may make more sense to bite the bullet and get the benefit of a 95 percent subsidy on the other side of the donut hole.
