Why the High Cost of Prescription Drugs?

(This article first appeared in the September/October 2019 issue of the American Postal Worker magazine) 

Americans are not able to negotiate over the price of prescription drugs for several reasons. First, laws passed by Congress forbid the government from negotiating prescription drug prices for its citizens and make it illegal to import prescription drugs from other countries that do negotiate drug prices. Secondly, unlike most other goods and services, you cannot walk away and not buy the lifesaving drugs you need. That gives you zero negotiation power at the pharmacy.

This has created a system that has made drug prices highest for those who can afford it the least and unfair to use for all. The uninsured pay retail prices for drugs. The underinsured, out of financial necessity, tend to choose high deductible health insurance plans or those are all that their employer offer. High deductible plans force patients to pay the full cost of drugs until their considerable deductible is met. Those lucky enough to have quality health insurance still are paying for the huge mark-up on prescription drugs – if not in copays and deductibles, then in the large premium increases in their paychecks.

Several states have either passed or are passing legislation so they can purchase drugs from other countries for state employees in an attempt to stem the tide of rising prescription drug costs. I look forward to seeing if the courts side with the states and allow them to go outside the country to seek relief from the rising costs of prescription drugs.

Medicare Advantage Plans

Medicare Advantage plans have been in the news recently and not for good reasons. There have been news stories of Medicare Advantage plans overcharging Medicare for services not provided to seniors. This issue is important to postal workers as the USPS has mailed newsletters to our retirees touting the availability of Medicare Advantage plans in lieu of FEHB health insurance and traditional Medicare Part B.

Switching to a Medicare Advantage plan is an option our members have and as each person’s health care needs and finances are unique, it is a personal choice. Therefore, I will not offer any advice on this subject, but as the information that was provided to our members was lacking, I will relay some facts from the Medicare.gov website.

Medicare Advantage plans are a type of Medicare health plan offered by a private company that contracts with Medicare. Medicare Advantage plans provide all of your Part A and Part B benefits. Medicare Advantage plans include:

• Health Maintenance Organizations
• Preferred Provider Organizations
• Private Fee-for-Service Plans
• Special Needs Plans
• Medicare Medical Savings Account Plans

If you are enrolled in a Medicare Advantage plan:

• Most Medicare services are covered through the plan
• Medicare services are not paid for by Original Medicare Most Medicare Advantage Plans offer prescription drug coverage.

The network, area covered, drug coverage and costs may be different with Medicare Advantage plans than what our members are used to with FEHB coverage and traditional Medicare. I urge our members to get all the information when making this decision. This is of paramount importance: make sure, if you do make this decision, that you elect to suspend your FEHB coverage and NOT cancel your FEHB coverage as the form is very confusing.