Wednesday, February 27, 2008

Part D structure is undermiining Medicare's long term financial security--duh

When President Bush signed the Medicare drug prescription law in 2003, describing it as "the greatest advance in health care for America's seniors," he was criticized because the plan could prove to be hugely costly and someday end up wrecking the Medicare budget.  Some critics were concerned about the law's mind-boggling complexity and provision, known as Part D, which subsidizes the supply of drugs by private insurers without allowing Medicare to negotiate prices. And others thought that rushing to a new entitlement to guarantee Bush's second-term re-election without really understanding what we would be paying in perpetuity was irresponsible.

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

But the program has failed to protect low-income Americans from high out-of-pocket costs for their medications, according to a 2007 survey of 16,000 seniors by the Kaiser Foundation, Commonwealth Fund, and Tufts-New England Medical Center. And program costs that critics had feared would exceed government projections by as much as $750 billion 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 in Medicare spending in 2006, the fastest rate of growth since 1981 and double the rise in 2005, while overall health spending had increased only 6.7 percent. Privatizing delivery of drug benefits, the committee added, "has been costly and inefficient and enriched the drug companies and the insurance industry at the expense of seniors and taxpayers." Program costs would have been $11.7 billion less, if plans obtained rebates compared to those negotiated by Medicaid and the Veterans Administration.

Source/more:  SF Chronicle,

Medicare | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference Part D structure is undermiining Medicare's long term financial security--duh: