To the Editor:
Buried in all the bad news about long-term deficits in Medicare is a little talked about success story – Medicare Part D, the prescription drug benefit signed into law by President Bush.
A survey of enrollees reported in USA Today showed that about 90 percent are satisfied with the program. In addition, the premiums seniors pay average $30 per month, well below the $60 estimated when the law went into effect in 2006, according to www.Forbes.com. The cost of the program to Medicare is 46 percent lower than when Congress created the benefit in the Medicare Modernization Act in 2003, states www.Forbes.com. (How many entitlement programs can say that?) And because seniors can afford to take their prescriptions, they are staying out of the hospital and skilled nursing facilities saving Medicare $12 billion annually or about $1,200 for each enrollee.
So, why does Part D work so well? Simple. Part D allows competition between competing plans. This simple fact allows seniors to choose among various offerings based on the plan of benefits and cost. Part D providers drive a hard bargain with drug manufacturers and then compete to get seniors to choose their plan. If a plan doesn’t provide quality service at a good price, they know seniors will choose another plan next year.
But seniors need to be vigilant. Congress is considering whether to change Part D's market-based structure by starting a rebate program for some beneficiaries, which could drive up costs. Douglas Holtz-Eakin, former director of the Congressional Budget Office, estimates this would increase seniors Part D premiums by 20 to 40 percent.
Before I retired, I helped businesses purchase quality health benefits for their employees, so I am familiar with how the health care system works. My clients always did best when we gave employees choices among plans and benefits. Medicare Part D’s competitive model is working. The politicians should leave it alone.