Part D structure is undermiining Medicare’s long term financial security–duh

When President Bush signedthe Medicare drug prescription law in 2003, describing it as “thegreatest advance in health care for America’s seniors,” he wascriticized because the plan could prove to be hugely costly and somedayend up wrecking the Medicare budget.  Some critics were concerned about the law’s mind-boggling complexityand provision, known as Part D, which subsidizes the supply of drugs byprivate insurers without allowing Medicare to negotiate prices. Andothers thought that rushing to a new entitlement to guarantee Bush’ssecond-term re-election without really understanding what we would bepaying in perpetuity was irresponsible.

At first look, the plan has fulfilled its goal of providing drugcoverage to Medicare beneficiaries. According to the Centers forMedicare and Medicaid Services, 40 million seniors now haveprescription drug coverage. A study from IMS, a pharma-industry datacollection firm, shows that seniors in Part D plans filled about 486million prescriptions in 2006, boosting use of the most profitablechronic disease drugs.  Drugs for high blood pressure and high cholesterol accounted for 122million prescriptions. More than 20 million prescriptions were fordrugs to treat diabetes, pain, cancer and ulcers. And rounding out thetop 10 were antibiotics, hormones, blood thinners, and drugs forseizures and psychiatric disorders.

But the program has failed to protect low-income Americans fromhigh out-of-pocket costs for their medications, according to a 2007survey of 16,000 seniors by the Kaiser Foundation, Commonwealth Fund,and Tufts-New England Medical Center. And program costs that criticshad feared would exceed government projections by as much as $750billion by the end of the decade have materialized sooner than expected.

According to the House Oversight and Government Reform Committee,the implementation of Part D contributed to an 18.7 percent increase inMedicare spending in 2006, the fastest rate of growth since 1981 anddouble the rise in 2005, while overall health spending had increasedonly 6.7 percent. Privatizing delivery of drug benefits, the committeeadded, “has been costly and inefficient and enriched the drug companiesand the insurance industry at the expense of seniors and taxpayers.”Program costs would have been $11.7 billion less, if plans obtainedrebates compared to those negotiated by Medicaid and the VeteransAdministration.

Source/more:  SF Chronicle, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/27/EDBJV8O9K.DTL