I have heard numerous Republicans defending the prescription drug plan, Part D of Medicare. They say it is working as it was meant to, meaning private insurance coverage through Medicare, and that it’s under budget, something rare with the government involved.
Is this true or not?
"At a press conference on Friday, CNSNews.com asked Gingrich, “You were a prominent supporter of the Medicare prescription drug plan that President Bush signed into law in 2003. The Medicare trustees now say that plan is $7.2 trillion in unfunded liabilities over the next 75 years. Do you regret your support for the plan looking back?”
"“No," said Gingrich. "I think that we--I mean, I am for dramatic reform of Medicare. I chaired the Medicare reform task force which saved it in 1996 when the trustees said it was going to go broke, and we passed changes which enabled them to say that we had postponed any problem for well over a decade."
I’m glad you asked, MID...in that both husband and I recently got involved with the prescription plan...Part D.
It’s a bit convoluted how it’s configured but with my accounting background, I understand it. I sure can understand why seniors don’t understand.
It’s set up on a two level type of system. For those who don’t use too many prescription druges it has an initial layout that has the user paying for low-cost drugs like antibiotics and stuff. Usually it’s some kind of deductible that varies by plan, generally around $150. So if you’re not on some sort of constant drug usage you are essentially paying for drugs you might need in the course of living...like I said, antibiotics, decongestant, temporary allergy relief.
Then the plans pay around 65% of drugs...leaving the user to pay for 35-40%, a not too difficult price to pay.
After the “cost” of drugs in a calendar equals $2800....you then enter what they call a donut hole. This is tricky but again, as it was originally conceived, there’s a logic to it.
Husband and I both take drugs that we must take all the time and will probably have to forever. We both are just going to miss that donut hole, or if we enter it won’t be much.
Once in the donut hole, the user pays 100% of the cost of the drugs until the user has paid $4500 in a calendar year. You then enter what is called “catastrophic coverage”. At this point the cost of drugs drops dramatically...mere pennies a day in many cases.
This scenario covers someone who may have, say, a serious cancer. Medicines that are very expensive are needed for this and the setup provides for this.
The most a user must pay is $4500 a year, besides the snippets during catastrophic coverage. Now $4500 is a lot of money but it’s kind of rare when one gets to that point. I must take Crestor, Tricor, ....kind of expensive drugs to keep my arteries from clogging. Husband must take lots of Keppra, anti-seizure medication from his brain infection.
We both fit exactly into the mold of a Medicare user that will probably need drugs the rest of their lives and after the deductible, we mostly are limited to 35% of the cost of our meds. If we go into the donut hole at all it’s briefly before another calendar year begins.
Bottom line, we each pay about...oh maybe $1500 a year each for our druges but hey, they keep us alive and healthy and that amount includes the monthly fee.
So the way it’s set up does make sense in that there is a brief time when the cost of drugs goes way high but there’s a cap to protect those in need of a temporary need of expensive medicine. Again, it really can be confusing.
Also, last year I think, congress did something to abate the pain of that “donut hole”, an agreement with the drug companies to reduce the cost of their meds when a user is in that donut hole.
The drug companies recoup the cost of their research and development costs, the biggest cost of producing a drug because the bark of a tree doesn’t cost all that much. The trials and tests to figure how much tree bark to prescribe, how to harvest it, to test it over a long period of time as the lawyers are out there.
After a user uses a drug product for a while, why dang, they get a discount....like folks using larger quanities of a product do.
The gubmint picks up the cost of the drug once a user is in a situation where the cost of the drug is very high.
I heard Schumer talking about the drug plan this morn and I wanted to shoot him dead. Either he don’t know what he’s talking about or he’s deliberately deceiving.
Ryan’s plan would likely be loosely based on Medicare Part D and by me it’s a good plan.
But hey, you gotta get perfectly coiffed pubs out and splaining things much like I just did but they don’t want to muss head hairs, they’re not as smart as me, they don’t want to miss cocktail party invites or....ALL OF THE ABOVE.
I know Ryan’s plan will work much like Medicare Part D works because those insurance companies do want your business and the price of the Part D plan has now gone down two years in a row for me and husband.
CAUSE THEY’RE COMPETING...that’s why.
The pubs...they gotta do their jobs or serious folks, we simply HAVE to throw them outta there.
Appears to be true. And it’s a model for what Paul Ryan proposes to do with the rest of Medicare...which explains why Dems are terrified of it.
In 2010, average monthly premiums will be $30, just $2 above the 2009 level and lower than previously anticipated. Overall, the program’s costs this year have been $35 billion lower than forecast. Indeed, the program has cost less than anticipated four years in a row, making Part D a rare budgetary success story among federal programs.
These cost savings are largely driven by competition. In September, the Centers for Medicare & Medicaid Services reported that more than 2,000 prescription drug plans will be available nationwide to the 26 million seniors enrolled in Part D.
I’ve heard Democrats saying it is a disaster and pointing fingers in our direction.
“In today’s letter, we provide estimates of the impact on the 75-year fiscal gap from net spending under current law on Medicare Part D (the prescription drug benefit) and possible permanent extension of the individual income tax provisions enacted in 2001, 2003, and 2004 past their scheduled sunset in 2010. In particular:
The effect of spending for Part D (net of income from premiums) on the 75-year fiscal gap amounts to 0.9 percent of GDP”.
This entry above was posted on Friday, March 14th, 2008 at 3:20 pm (Written by Peter Orszag)
I tend to think Part D was well written over the objections by Democrats.
Democrat talking points are highly inflammatory. Evident in this article from 2009;
Bruce Bartlett is a former Treasury Department economist and the author of Reaganomics: Supply-Side Economics in Actionand Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. Bruce Bartlett’s new book is: The New American Economy: The Failure of Reaganomics and a New Way Forward. He writes a weekly column for Forbes.
SNIP “the unfunded drug benefit, which added $15.5 trillion (in present value terms) to our nation’s indebtedness, according to Medicare’s trustees”,
SNIP (from the article 2009)
Poster comments 2/26/2011;
Posted by jypdac;
“Mr. Bartlett writes about $1 trillion over 10 years and uses original estimated costs. Actual costs are running 40% under those numbers. Still a lot of money, but..SNIP
Mr Orzag believes it was well written;
http://www.washingtontimes.com/news/2009/nov/18/health-programs-have-history-of-cost-overruns/print/
The most famous example of a federal health program coming in below estimates is Medicare’s Part D prescription-drug program, which Congress enacted in 2003. Part D’s actual costs have been lower than CBO’s estimates.
A major reason for this trend “is likely a reflection of the competition that’s occurring in the private market,” said CBO Director Peter Orszag, who is now the White House budget director.
http://www.allhealth.org/issues.asp?wi=7
Embargoed for release until:
Thursday, September 7, 2006
Pharmacists and Physicians See Real Benefits from Medicare Drug Law, But Most Think it is Too Complicated and Report Customers and Patients Experiencing Problems
Substantial majorities of pharmacists (86%) and physicians (71%) believe that the prescription drug law is helping people on Medicare save money on their medications, according to two new national surveys conducted by the Kaiser Family Foundation.
At the same time, pharmacists (91%) and doctors (92%) believe the law is too complicated. A majority in both professions report that Medicare beneficiaries who they see are encountering problems in getting their medications, sometimes with serious consequences.
“We have surveyed seniors many times, and now pharmacists and doctors, and the story is remarkably consistent: The benefit is providing help to millions as intended, but there are also problems, and the complexity of the law is an issue for many,” said Kaiser Family Foundation President and CEO Drew E. Altman, Ph.D.
For further information contact:
Craig Palosky, (202) 347-5270 or cpalosky@kff.org
Larry Levitt, (650) 854-9400 or llevitt@kff.org
In the final analysis, its big and its complicated.Its a government program. Big surprise!
Its not near as expensive as the CBO estimated.
Compare it to Obamacare which robbed it of 500 billion and renders it obsolete in 2014?
Both parties felt it was a good idea. The party in power could root out waste fraud and abuse and the both Part D and the donut hole would be paid for but the Democrats decided to foist a 2200 page monstrosity upon the American public against the wishes of half the country and got not a single Republican vote in it’s favor.
In the final analysis, it won’t matter a whit unless we repeal Obamacare.