A season for health and wealth

From now through the end of the year, seniors have a chance to enroll in a Medicare prescription drug plan, and those who already are enrolled can switch plans.

With Congress debating many changes to the Medicare program, seniors should try to get the most out of this year’s open-enrollment period.

The Medicare prescription drug benefit is different from most government programs because seniors have a choice of private drug plans which receive subsidies from the Federal government to provide their drug coverage. This gives seniors a wide range of options in premiums, co-payments and drug choices.

The drug benefit program is designed to keep prices low by forcing private plans to compete against one another. This has resulted in greater choice and flexibility. Because seniors are smart shoppers, the drug benefit has proven to be among the most cost-effective government programs in history.

When the program was created in 2003, lawmakers predicted seniors would pay about $44 per month for drug coverage in 2009. According to the Kaiser Family Foundation, the average monthly premium in 2009 was only $35. Further, the program is saving taxpayer money, coming in nearly 40 percent under budget so far.

Some lawmakers, though, want to change the program because they don’t like involvement by private plans, despite the fact that the program is highly popular with seniors. This could mean that seniors with low incomes would have access to fewer drugs while others wind up paying higher premiums.

The health reform bill that recently was passed by the U.S. House of Representatives allows the federal government to negotiate prices directly with pharmaceutical companies. This might sound desirable, but the government doesn’t negotiate. With the rest of Medicare, it dictates prices and imposes benefit restrictions rather than relying on competition and consumer choice to contain costs.

The legislation also would force lower-income seniors to get their drug coverage through Medicaid rather than Medicare, giving them no choice of private plans and forcing them into a program where the government determines what drugs will and will not be available to them.

This could save the federal government money, but other changes in the legislation would result in higher drug costs for other seniors. According to the nonpartisan Congressional Budget Office, these changes could result in a 20 percent increase in prescription drug premium costs for Medicare beneficiaries over the next decade.

Government price manipulation also poses an enormous threat to the future of drug innovation. If drug companies are forced to sell their products at below-market prices, they’ll look less attractive to investors, and thus have less capital for research and development of new medicines.

For now, though, the Medicare drug benefit is a good deal for seniors – all the more reason to take advantage of this open-enrollment period. Many plans have lowered their co-payments and eliminated deductibles. Others now provide coverage in the infamous “donut hole.”

Those who are Internet-savvy can sign up or switch plans by visiting http://www.Medicare.gov. Using the “Medicare Plan Finder,” seniors can compare how different drug plans stack up against one another. Those without web access can call 1-800-Medicare and speak to a customer service representative.

Just remember to act before the end the year, since the open-enrollment period ends on December 31. And pay close attention to what Congress is doing that might change options and premiums for seniors in the future.