Journalist Philip Moeller, who writes widely on health and retirement, is here to provide the Medicare answers you need in “Ask Phil, the Medicare Maven.” Send your questions to Phil.
Jim: How can Medicare penalize me for paying for my own prescriptions? I lost my job and my insurance in 2008 and have been paying for my prescriptions since then — all of which were affordable. Now, I have signed up for Part D (drug coverage), and I understand I will have “x” amount taken from my Social Security each month for the rest of my life. This is ridiculous and just another way for the government to get their hands in my pockets. I thought I was saving the taxpayers some money. I love my country, but I hate the politicians. How can regular people catch a break? I lost my job, my house and my retirement. I have nothing left to give them.
Phil Moeller: My heart goes out to Jim and to millions of other Americans whose financial futures and dreams have been hollowed out along with much of the traditional American business structure that provided their livelihoods for generations. But I understand the economic reasons why Medicare socks late enrollees with penalties for both Parts B and D of Medicare. If Medicare participation was voluntary, healthy seniors wouldn’t buy coverage until they needed it. And if they experienced unexpected medical emergencies, they’d likely wind up on Medicaid, where nearly all of their health care expenses would be paid by taxpayers. Meanwhile, back in Medicare land, only sick people would be insured. Medicare health expenses, on a per capita basis, would soar. And there would be no offsetting Medicare premiums or deductibles being paid by healthy people. These premiums help defray costs for those older Americans with lots of health care needs. This is the “pooling of interest” logic that supports making it in all seniors’ best financial interest to have Medicare.
Jim most certainly has, as he claims, been saving taxpayer dollars by paying for his own drug prescriptions. The big weakness in his argument is what would he do if he ran into a health problem and needed one of the new and extremely costly miracle drugs? Without a Part D plan, he would not be able to pay for such a drug. But if he could sign up anytime for a Part D plan with no penalty at all, he would become just another example of what’s called “adverse selection,” where only sick people get insurance.
So while I truly do sympathize with Jim’s situation, I do not want to give him a free pass to either have or not have Medicare prescription drug insurance based on his personal needs. The Medicare boat may be leaky and full of unclear and even unfair rules. But we all need to be in it to help the system survive, even with all its admitted problems. My anger over drug expenses is not directed at Medicare’s rules, but at the often outrageous prices that Jim and everyone else is forced to pay for drugs in this country. I’d focus reform efforts here, not on Part D late-enrollment penalties.
Read more: PBS
Philip Moeller is a research fellow at the Center on Aging & Work at Boston College and co-author of “How to Live to 100.”
He wrote his latest book, “How to Get What’s Yours: The Secrets to Maxing Out Your Social Security,” with Making Sen$e’s Paul Solman and Larry Kotlikoff. He is now working on a companion book about Medicare.