The Wall Street Journal tries to put some lipstick on a pig…

If you’re looking for some good news from Washington, consider this semi-miracle: The Medicare prescription drug benefit is so far costing less than anticipated, while seniors are getting more insurance options at lower prices. Lesson: Maybe private competition works.

This doesn’t mean we’re changing our minds that the new drug entitlement was a policy mistake at an estimated long-term cost of $8 trillion, give or take a trillion. But now that the program exists, it matters whether it turns into another price-controlled, one-size-fits-all federal entitlement, or whether the seeds of market competition planted in the bill are allowed to grow.

The early returns are encouraging, on both price and choice. Over the weekend insurers began marketing their 2007 Medicare drug plans, and all states except Hawaii and Alaska have more than 50 private options available—up from an average of about 40 in 2006. Seventeen insurers are selling nationwide plans, up from nine this year. That compares with the one or two that critics of including private plans predicted would be available in many markets.

The average monthly premium that seniors pay is again $24, far lower than the $37 originally estimated by government actuaries. And while Democrats have hammered away at the idea that having seniors choose among competing drug plans is too “confusing,” recent polls show satisfaction with the benefit in the 80% range.

All of this would also seem to rebut the current Democratic campaign theme that having drug prices “negotiated”—i.e., dictated—by government is an urgent priority. Democrats point to the drug coverage provided by the Veteran’s Administration as a model. But the VA usually keeps costs down by refusing to pay for newer, more effective medicines. The VA drug formulary includes only 19% of the medicines approved by the FDA since 2000.

One of our fears about the drug program is that it will devolve into price controls, thus destroying incentives for research and development as European governments have done. It would be a cruel irony if the Medicare drug benefit were to have the effect of delaying the cure for, say, Alzheimer’s. Yet this is where Democrats seem to want to go.

Good points, all, but I’m still not happy about the prescription drug plan.  We need to be moving away from entitlements, even market-based entitlements, not toward them.