Medicare beneficiaries find Part D is a disaster
I found this in the Concord Monitor:
Meg Heckman’s “Some stranded by Medicare benefit” (Monitor, Feb. 13) was an important story. It is one of the few to counter the hype that Medicare Part D is dramatically cutting the cost of prescription drugs for all seniors.
Heckman describes how this legislation derailed the Medication Bridge Program, which provided about 17,000 New Hampshire residents with free or reduced-price medications. Drug costs suddenly increased for most of this population.
The new Medicare legislation also eliminated prescription drug coverage from Medigap insurance policies that many retirement programs offered to supplement Medicare. Suddenly, retirees found themselves automatically enrolled in Medicare Part D. For some, the costs for the same prescription drugs they had been taking for years increased by more than 200 percent.
There are undoubtedly other sub-populations of Medicare beneficiaries who are seeing the costs of prescription drugs increase as a result of Part D, and enterprising reporters such as Heckman should find them.
But the big story, largely untold, is how the Bush administration and its enablers in Congress set up taxpayers and Medicare beneficiaries alike to pay inflated costs for prescription drugs.
They did this, first, by preventing Medicare from negotiating with pharmaceutical companies to establish discounted drug prices for their 42 million beneficiaries. This flies in the face of a basic purchasing principle: Buy in large quantities and get a lower price.
The federal government is already doing that for other programs. The U.S. Department of Veterans Affairs negotiates bulk discounts with the same pharmaceutical companies for the same drugs that seniors use, but it pays a much lower price.
Take Protonix, a drug for ulcers. According to a Boston Globe article, the VA can buy a year’s supply of this drug for $253. Under Medicare Part D, the cost is $1,080.
If Medicare could negotiate prices like the VA, it might reduce the average costs of drugs by almost 50 percent. The inflated drug costs of Part D are a giveaway to pharmaceutical companies, enabling them to reap windfall profits from this legislation.
The second way the Bush administration increased the cost of prescription drugs was to prevent Medicare from operating its own insurance plan. This was a handout to the insurance industry.
The Bush administration, mired in market fundamentalism, insisted that Medicare beneficiaries could get drug coverage only through a private insurance company. Although most news stories have focused on the mind-numbing complexity seniors encounter in trying to choose among 40 private insurance plans, the increased cost of privatization is seldom mentioned.
For example, the administrative costs of Medicare are in the range of 2-3 percent of total costs; for private insurance companies, they’re 10-15 percent. These additional costs are passed on to taxpayers and beneficiaries. The bottom line is that private insurance costs more.
Medicare Part D passed in the House in the dead of night by one vote. The Bush administration promised doubting Republicans that the legislation would cost no more than $400 billion over 10 years. The estimated cost is now almost twice that - $776 billion.
If this mess is what we get for partially privatizing Medicare, I can’t imagine the disaster that would have happened if Bush had been able to partially privatize Social Security.