In a public-private partnership to help thousands of seniors struggling to pay for prescription drugs, Gov. Martin O'Malley plans to announce today a deal with CareFirst BlueCross BlueShield to help cover those caught in a Medicare gap.
The agreement would help seniors bridge the "doughnut hole," a much criticized cost-saving measure built into the Medicare prescription drug benefit passed by Congress in 2003. The program covers annual prescription costs up to a certain amount and costs above a higher threshold, but not those in between, leaving a hole in the middle of the coverage plan.
Critics of the system say that seniors who fall into the gap often go without medications because they can't afford them, leading to more illness.
"Too many of our neighbors, especially our seniors, are still forced to choose between taking their prescription medications and putting food on their table," O'Malley said in a statement.
The governor plans to announce the program today during an appearance at a Baltimore senior center with Mayor Sheila Dixon.
An estimated 3 million seniors fell into the coverage gap last year. The proposed Maryland subsidy, which would require legislation in the General Assembly, would help an estimated 7,500 lower-income residents. CareFirst has pledged to cover the cost of the $7 million annual program; no state funding would be needed.
The Maryland subsidy would cover seniors with incomes including Social Security benefits and retirement plans up to 300 percent of the federal poverty level, or about $42,000 for a couple. The amount of the subsidy would depend on how far into the doughnut hole seniors fall. About half of those who would qualify have costs not covered by the current plan of less than $500, but about one in six pays $1,500 to $3,000 for drugs that the subsidy would cover.
CareFirst also provides a $25-a-month subsidy to help lower-income residents cover Medicare drug plan premiums. Several other states have similar programs to help the elderly afford prescription drugs and to mitigate the effects of the doughnut hole.
"These are elderly folks who need their drugs and have limited means," said Chester Burrell, chief executive officer of CareFirst, the region's largest insurer. "People literally run out of funds, and they find it very difficult to pay for their drugs."
The subsidy builds on work by the state legislature to address the rising cost of health care. The issue has been in the national spotlight, though political solutions often have been constrained by tight budgets.
O'Malley signed a bill last year to reduce the number of uninsured residents, mostly by enrolling them in Medicaid, the government health insurance program for the poor. That effort was pared back from an earlier proposal, and lawmakers and the governor are counting on possible slot-machine revenue to help pay for it. Voters will decide in the November election whether to approve the gambling plan.
Congress enacted the Medicare benefit several years ago, allowing enrollees to choose from private drug plans beginning in 2006. The plans must cover the first $2,510 worth of prescriptions. That figure includes both the costs borne by the insurance company and the co-payments that enrollees must pay.
Above that amount, enrollees pay most of their drug costs until they reach $5,725, when Medicare coverage kicks in again.
The doughnut hole was designed to hold down the cost of the drug benefit. Increasing the deductible wasn't an option because lawmakers wanted most people to be able to afford the program for political reasons, said Robert M. Hayes, president of the Medicare Rights Center, a national consumer group. He added that some proponents rationalized that when out-of-pocket medical expenses rise, people shop for less expensive generic drugs.
"No other drug plan and no other kind of insurance starts covering you, stops covering you and then starts covering you again," Hayes said.
The result has been that some seniors can't afford prescriptions such as pain medications, blood thinners and diabetic drugs. Senior advocates say that some enrollees have been forced to choose between medicine and food, or between their spouses' drugs and their own.
Mary Lou Brown, a 91-year-old Odenton resident who might benefit from the proposed subsidy, said she has refused newer blood pressure pills that her doctor prescribed because they were too expensive. Her prescription drug costs are so high that she would have to pick up much of the cost under her Medicare drug plan, so she opts for generic drugs whenever possible.
"It's about time they do something about this," Brown said, adding that Medicare has become a confusing labyrinth that often doesn't cover her medical needs. "This isn't the way Roosevelt would have had it."
(President Franklin D. Roosevelt considered establishing universal health care, though Medicare wasn't created until President Lyndon B. Johnson's administration.)
Burrell, who took the helm of CareFirst in December, said the subsidy helps fulfill the insurer's public service mission, but it also generally lowers hospital and other expenses that arise from seniors not taking prescriptions. He was approached about adding the subsidy by Del. Peter A. Hammen, chairman of the Health and Government Operations Committee, who championed the health-care extension bill last year.
"I thought this is something CareFirst should be doing," Hammen, a Baltimore Democrat, said. "This was a void they can fill."