In a new study involving a researcher from Washington University in St. Louis’ Olin Business School, the co-authors discovered something they say surprised them: Medicare Part D’s setup actually inhibits insurers from seeking higher subsidies from the government. It keeps subsidies in check by virtue of the way it’s designed.
Medicare Part D decisions can be confusingDuring the next six months, Medicare recipients will need to enroll in one of the new prescription drug coverage plans. But with the deluge of information about Medicare Part D, some reliable and some not, “seniors find themselves in an environment of fear and confusion,” says Edward F. Lawlor, Ph.D., a Medicare expert and dean of the School of Social Work at Washington University in St. Louis. “There is so much noise about the prescription drug program, but people are not getting clear, simple information. Many seniors aren’t even entertaining making the proper plan choice.”
The urban legends about managed care convey a sense that managed care often leads to early death. However, the business methods employed by managed care frequently result in reduced cost for the companies and the individuals enrolled in the programs. Because of the potential savings, the trend has been to encourage Medicare enrollees to use managed care programs. A recent study by a professor in the business school Washington University in St. Louis and a colleague suggests that it’s not managed care that increases mortality; it’s lack of drug coverage. The study suggests that a one percent increase in the number of people enrolled in Medicare Managed Care without drug coverage would result in an additional 5,100 deaths among the elderly population of the United States in one year.