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Medicare Part D Saves Money for Many Participants
National Bureau of Economic Research ^ | August 2008 | Linda Gorman

Posted on 08/05/2008 8:51:38 AM PDT by reaganaut1

Passed in December 2003 and operational in January of 2006, Medicare Part D subsidizes prescription drugs for the elderly in the United States by contracting with private plans to provide drug coverage. Part D enrollment is voluntary. The government pays each plan a lump sum for each enrollee that chooses it, and the private plans, not the government, negotiate drug prices.

In The Effect of Medicare Part D on Pharmaceutical Prices and Utilization (NBER Working Paper No. 13917), co-authors Mark Duggan and Fiona Scott Morton review Part D's performance in its first year and estimate that a branded drug sold to an elderly consumer covered by a Medicare Part D plan cost at least 24 percent less than the same drug sold to an uninsured consumer. Branded pharmaceutical prices on average rose from 2003 to 2006, but those brands with substantial sales moving from cash-paying patients to Medicare Part D patients increased much less than other brands. At least for the first year of the program, these results do not support the claim that leaving the federal government out of Part D price negotiations would cause branded drug prices to rise.

Relative price declines were concentrated in therapeutic categories in which plans could pick and choose the favored drugs from a variety of therapeutic substitutes. Interestingly, these price declines did not appear in the therapeutic categories in which there are very few substitutes for a treatment, suggesting that plans' ability to shift sales among substitute products creates price competition.

(Excerpt) Read more at nber.org ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: healthcare; medicare; medicarepartd
Democrats have been critical of Medicare Part D, which allows private insurance plans to compete to provide the benefit. A PowerPoint presentation of the research is at http://www.hsrd.research.va.gov/for_researchers/cyber_seminars/archives/partd-va-feb08.ppt .
1 posted on 08/05/2008 8:51:38 AM PDT by reaganaut1
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To: reaganaut1

bttt


2 posted on 08/05/2008 9:19:58 AM PDT by kcm.org (Conservatives bashing Sen. McCain has Ronald Reagan spinning in his grave!!!)
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To: long hard slogger; FormerACLUmember; Harrius Magnus; hocndoc; parousia; Hydroshock; skippermd; ...
Socialized Medicine aka Universal Health Care PING LIST

FReepmail me if you want to be added to or removed from this ping list.


3 posted on 08/05/2008 9:30:33 AM PDT by socialismisinsidious ( The socialist income tax system turns US citizens into beggars or quitters!)
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To: reaganaut1

“The government pays each plan a lump sum for each enrollee that chooses it”

For government, they mean us taxpayers. Nice feeling looking at my pay slip and seeing that medicare deduction knowing that complete strangers are getting free goodies because of my hard work and Bush’s “compassion.”


4 posted on 08/05/2008 9:50:57 AM PDT by KantianBurke (President Bush, why did you abandon Specialist Ahmed Qusai al-Taei?)
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To: reaganaut1
Medicare Part D Saves Money for Many Participants

Yes, as young families are raped by taxes, production continues to flee overseas, and our children are saddled with unsustainable debts, Medicare Part D is "saving money" for the wealthiest segment of the population.

Nice job, W.

5 posted on 08/05/2008 9:54:40 AM PDT by Jim Noble (When He rolls up His sleeves, He ain't just puttin' on the Ritz)
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To: reaganaut1
Part D enrollment is voluntary

Yes, but.....

Read the fine print.

Scenario:
One is eligible.

One declines Part D coverage.

Later years, as health may fail and more prescription drugs are required, one may decide to enroll.

Upon the later enrollment, one is penalized for each year one did NOT participate (about 1% of the premium -- per year one fails to enroll).

The penalty is added to the premium when the person does finally enroll. Thus, failure to participate when first eligible could result in higher premiums later.

6 posted on 08/05/2008 10:12:02 AM PDT by TomGuy
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To: Jim Noble

The Walmart generic program is saving people more money and it doesn’t cost the taxpayers anything. I’m getting a $4 generic now that would have cost $150 a month a year ago.


7 posted on 08/05/2008 10:31:50 AM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Moonman62

Hurrah for Wal-mart! The $4 tag keeps a lot of Rx off of
Part D
barbra ann


8 posted on 08/05/2008 11:49:04 AM PDT by barb-tex ( A prudent man (more so for a woman) foreseeth the evil and hideth him self)
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To: reaganaut1
The government will automatically enroll seniors who don't enroll themselves. This happened more than once to my Mom and it was a nightmare to get her Part D cancelled.

Leave it to the bureaucracy to do what people don't want done.

9 posted on 08/05/2008 4:24:40 PM PDT by MrsPatriot (W...Still the President!)
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