Everyone with Medicare should have Medicare Part D prescription drug coverage unless they have drug coverage from another source. But, our government can’t control the corporate greed among the Part D insurers. As a result, people often spend more in copays for their drugs through Part D coverage than they would using a mail-order pharmacy and paying the full price of the drugs, and Medicare spends billions more than it should on the drugs insurers do cover, reports Christopher Weaver, Tom McGinty and Anna Wilde Mathews for the Wall Street Journal.
The WSJ reporters focus on how the mail-order pharmacies owned by UnitedHealth, CVS and Humana send Part D enrollees way more drugs than they need, $3 billion worth in 2021, 2022 and 2023. And, Medicare pays. UnitedHealth’s pharmacy sent one enrollee more than twice as many pills as he needed for a year! Not only do these extra pills drive up spending, they can lead people to take more pills than needed or the wrong pills.
Even though these mail-order pharmacies were responsible for less than 10 percent of all Medicare prescriptions, they dispensed nearly 40 percent of the excess drugs. These pharmacies too often refill 90-day prescriptions when the refill is unnecessary. Of course, sometimes people need these refills, but sometimes they receive them automatically when they are not needed.
The issue is complicated because a substantial cohort of people with Medicare need their medicines and are unable to manage the mail-order pharmacy emails and text messages regarding refills. Automatic refills ensure they have the drugs they need. At the same time, the insurers are pushing the drugs on people who don’t need them and lining their pockets in the process. They profit from dispensing fees and drug markups.
During the Covid pandemic, Medicare allowed insurers to send out refills 68 days after the 90-day supply expired. The WSJ reporters found that UnitedHealth’s mail-order pharmacy sent out refills even sooner than that 11 percent of the time.
Patients who try to stop automatic refills that they do not need have no financial incentive to do so when there’s no copay involved. When they try, some find that the insurers’ website makes it challenging to do so. It’s less frustrating to let the refills keep coming.
From a cost perspective, UnitedHealth was responsible for $142 worth of excess drugs for each of its Medicare enrollees over the three years, Humana was responsible for $90 worth. Both insurers claim that the WSJ data is old and their refill policies changed post-pandemic.
UnitedHealth, Humana and CVS all own or otherwise contract with pharmacies, physicians and other providers in addition to running insurance companies. This “vertical” integration allows them more control over the services they cover. It also allows them to generate more profits. They can game a law that forbids them from spending less than 85 percent of Medicare dollars on health care services. They simply pass the extra money to subsidiaries.
Here’s more from Just Care:
- Case study: Costco saves one couple hundreds of dollars over Medicare Part D
- 2026: Medicare Part D prescription drug costs and benefits
- Medicare Part D drug coverage stunts are rampant
- Prescription drug costs soar for people with Medicare Part D
- 2025: Planning for health care costs in retirement
