Tag Archives: Medicare

Financial, Legal

The CSRS Medicare Trap

HUH? Okay, if you are not a Federal employee this is Greek to you.   At age 65 you are automatically enrolled in Part A of traditional (AKA “Original Medicare). This is for hospital care. There is no charge for this. You already paid for it through payroll deduction. CSRS (Civil Service Retirement System) employees have Medicare but NOT Social Security taxes withheld from their income.  At age 65, you can choose to also enroll in Part B OR enroll in a Medicare Advantage Plan. Here is the trap for those of you who are married and retired CSRS employees.

  • You choose Part B, for which you must pay a monthly premium (currently $104.90).
  • You have three options to pay this premium
    • by mail (check or credit card) in quarterly installments
    • by debit from your bank or credit union (called EZ Pay)
    • by deduction from your retirement check from OPM
  • The catch: Whose Medicare account applies to you?

Despite the fact that my spouse (the former CSRS employee) paid into Medicare for more than 30 years (and I, several years less), unnoticed by us, the Social Security Administration (which operates Medicare) assigned her to my SSN (same number used for Medicare, with a suffix added). Result, the deduction from her retirement check is NOT possible. Nor, apparently, can her “claim” be switched to her number. Now, what is the big deal you might ask? She is still covered. We can still have the premium debited from the bank. True, but aside from the principle of the thing (which to us is no small matter–since she paid in for all those years) the setup for deduction from her retirement check is a simple, one-time deal. We never have to worry about bank account balance issues, changing accounts, etc.

So, if this may apply to you, look carefully at that letter you get a few months before 65. Check whose SSN is on the information they send you. Take action then, BEFORE all the paperwork is processed.

 

Financial, Politics

Cancer Rx: The $100,000 Myth

In an article in May AARP Bulletin, two professors detail the overpricing of cancer drugs (11 of 12 new drugs approved in 2012 costing over $100,000 annually) and debunk specious claims made by drug companies to justify the cost. According to the authors [see below for their names and bios],

“Why are companies charging so much? In one breath they say high prices reflect high research costs, and in the next they say prices reflect the added benefits of curing or controlling cancer.”

As to added benefits, the article notes that only 1 of the 12 drugs helps patients survive more than two months longer. The writers go on to painstakingly slice and dice the research cost claims ($1.3 billion to develop a new drug and get it approved) winding up with the conclusion,

“Removing that inflated estimate for basic research costs brings the net, median corporate research costs down to just $125 million developing drugs.”

Given that this reduced estimate is less than 10% of the inflated cost claim that the pharmaceutical industry claims, it seems obvious, if the article writer’s analysis is sound, patients, insurers (including Medicare) are being vastly overcharged. Which the authors point out is an overwhelming justification to permit Medicare to negotiate prices for drugs–rather than the industry protecting prohibition that Congress has imposed.

The article writers are: Donald Light, network fellow at Harvard University’s E.J. Safra Center for Ethics and a professor at Rowan University School of Osteopathic Medicine and Hagop Kantarjian, professor and chair of the Department of Leukemia at MD Anderson Cancer Center.