BOSTON, Nov. 1 (UPI) -- Health insurance companies have raised their premiums to price themselves out of the low-income segment of the Part D market, a U.S. study reveals.
The study's lead author, Dr. John Hsu of the Mongan Institute for Health Policy at Massachusetts General Hospital, says Medicare Part D was designed to encourage competition and subsidize prescription drug care for poor Medicare patients. Instead, he says, millions of them have been pushed to different prescription drug plans.
Part D reimbursements to insurers covering low-income patients are substantially lower than the actual costs incurred, Hsu says the study found.
"These insufficient payments create a perverse incentive for plans to avoid or shed low-income patients," Hsu says in a statement.
"Millions of our poorest elderly have been reassigned to different drug plans since the program began. These patients often have limited income and multiple medical conditions requiring several medications, so they can ill afford the turmoil associated with changing drug plans."
The original hope that private plans would compete for all Medicare patients by lowering premiums or at least limiting premium increases has not been realized, Hsu says.
"Instead, the system induces companies to play 'hot potato' with the poorest of our elderly," Hsu adds.
"According to these findings, the Part D prospective payment should be revised to fix these perverse incentives. This could be accomplished by increasing the subsidies for covering low-income patients or by improving the risk adjustment approach by, for example, incorporating information on prior drug use."
The study findings are to be published in the December issue of Health Affairs.