Will President Obama put an End to the Medicare Rip-Off?

Most Americans would not be surprised to learn that health care spending is an important part of our economy. They would probably be surprised to learn that health care spending exceeds 15 percent of our Gross Domestic Product (GDP).

To put this in perspective -- health care spending exceeds spending on housing or food. Health care spending is the single largest component of personal consumption spending in the United States. Imagine, Americans spend more on health care than they do on housing or food.

I think this helps explain why so many Americans go without health care -- you have to eat, and you need a roof over your head, first. Priorities.

The government spends a lot on health care. Last year, health care spending accounted for one quarter (25%) of federal government budget spending.

With the aging of the baby boomer generation, increases in population, and inflation-- federal government expenditures on health care are expected to rise to 50 percent of government non- interest related expenses by 2050.

I bet you didn't know this. When your elected representatives in Washington voted on the Medicare Modernization Act of 2003 they slipped in this dilly -- when Medicare buys prescription drugs from the pharmaceutical companies they are not allowed to negotiate the price they pay.

Let me put it this way, we the taxpayers pay full retail price when Medicare buys prescription drugs -- for us.

Now here is the part that is really odd. These same Washington politicians allow Medicaid and the Veterans Administration to negotiate purchases. Medicaid often pays 40 percent less than Medicare pays for the same exact prescription drug.

I can buy a 16 ounce can of Old El Paso refried beans in Publix for a $1.49. Or, I can go to Walmart and buy the same product in the same size for $1.09. I have a choice -- Medicare doesn't.

This leaves me wondering? What would happen if the buyers from Walmart were the buyers of prescription drugs for Medicare?

Now to my grip and shout out to President Barack Obama.

Many Alzheimer's caregivers go into the oblivion known as the Medicare Donut Hole. If your loved one takes Aricept and Namenda (not counting the other prescription drugs they might be taking) you are going into that dark hole. Figure around $300 a month against your $2,700 annual Medicare bogey level.

If you read my article on the Medicare Donut Hole you understand that in phase one of Medicare -- initial coverage limit -- you will pay $896.25 of the first $2,700 of drugs you purchase each year (Medicare pays $1,803.75, or there abouts depending on the mix of drugs).

Once you go into the Medicare Donut Hole you are on the hook until you go into your pocket for $4,350. Then, you get to the next level -- Medicare catastrophic coverage threshold.

Last year, we went into the Medicare Donut Hole. However, by my estimate if Medicare was negotiating prices the same way that Medicaid, the Veterans Administration, and Walmart do -- we might not have.

If you are young, say 75, and not in the Medicare Donut Hole you might not care. I bet you are thinking to yourself -- I don't pay anything for my drugs, Medicare pays.

I have two things to say to that thought.

• First, before dementia set in my mother did not spend a single cent in any year on prescription drugs. Demenita hit when she was 85.
• Second, every American taxpayer regardless of age is paying for the Medicare rip-off. Directly out of pocket and through income taxes.
  

It is time for this to stop.

President Obama?

The catlyst for this article was the re-reading of a speech that Federal Reserve Chariman Ben Bernanke gave on health care reform. If you would like to read his very informative speech -- go here.

Feel free to hit the Share button below this article. The Internet is a big place, but if we shout loud enough someone might hear us.

Subscribe to The Alzheimer's Reading Room--via Email

Bob DeMarco is a citizen journalist and Caregiver. In addition to being an experienced writer he taught at the University of Georgia , was an Associate Director and Limited Partner at Bear Stearns, the CEO of IP Group, and a mentor. Bob currently resides in Delray Beach, FL where he cares for his mother, Dorothy, who suffers from Alzheimer's disease. He has written more than 600 articles with more than 11,000 links to his work on the Internet. His content has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites.

The Alzheimer's Project DVD

Follow the Alzheimer's Reading Room on Twitter