The Medicare Prescription Drug Benefit Works.
Congress Should Let it Keep on Working.
The program’s positive impact to date is evidence that a major overhaul is neither necessary nor wise.
Medicare Part D is among the Most Successful Government Programs in History; Good Legislation, a Good Program, and a Solid Foundation on Which to Build
- After just one year in operation, the Medicare prescription drug benefit is providing comprehensive drug coverage for 38.2 million Medicare beneficiaries — 90 percent of the Medicare population.
- Costs during the first year were far lower than initially projected, and bids for 2007 by participating insurers are, on average, 10 percent lower than they were in 2006
- The fiscal success of the program, the high participation rates among Medicare enrollees and the high levels of satisfaction among participants are all attributable to the program’s competitive design. By combining private-sector competition with federal government oversight—not interference—the program has been able to achieve both cost-containment and flexibility while meeting the needs of the vast majority of enrollees.
Government Interference Will Limit Access and Choice for Medicare Beneficiaries.
The primary object of debate in Congress is one element of the Medicare Part D legislation known as the “non-interference provision” which prohibits the Secretary of Health & Human Services (HHS) from interfering in the negotiation of drug prices between participating health plans and the drug companies and pharmacies
- This provision was specifically included to reduce costs for Medicare beneficiaries and the federal government, and provide plans with incentive for participating in the program and working to obtain the best drug prices possible for their members.
- The lack of government interference fosters greater competition among participating plans, which results in lower costs, greater numbers of drugs covered by each plan’s formulary, and a greater range of coverage options, as well as reduced costs for the government.
- Ultimately repealing the non-interference provision will lead to a government takeover of the entire prescription drug program, which will ultimately mean reduced choices and reduced access for beneficiaries.
- The likely result is that the program will revert to a government-imposed national formulary and one-size-fits-all benefit design, with fewer drugs available to beneficiaries and fewer or no options when a plan doesn’t meet their needs.
- This dramatic change in the rules, despite the participating plans’ success in delivering good benefits at an affordable cost, would leave them with little incentive to continue their participation, further limiting beneficiaries’ choices.
