Say Anything Blog

The Boston Globe:

It sounded simple enough on the campaign trail: Free the government to negotiate lower drug prices and use the savings to plug a big gap in Medicare’s new prescription-drug benefit.

But as Democrats prepare to take control of Congress, they are struggling to keep that promise without wrecking a program that has proven cheaper and more popular than anyone imagined.

[...]

Drug-company lobbyists, Bush administration officials, and many congressional Republicans are preparing to block any effort to increase federal control over drug prices, saying the Medicare benefit is working well. They contend that instead of saving money, government negotiations could raise drug prices for all consumers while limiting choices for people on Medicare.

“This is going to be much more of a morass than people think,” said Marilyn Moon, director of the health program at the American Institutes for Research and a former trustee of the Social Security and Medicare trust funds. Negotiating drug prices is “a feel-good kind of answer, but it’s not one that is easy to imagine how you put into practice.”

The Medicare drug benefit, one of the Bush administration’s signature domestic programs, was created in 2003 and took effect in January. It has enrolled 22.5 million seniors, some of whom had no previous drug coverage.

Polls indicate that more than 80 percent of enrollees are satisfied, even though nearly half chose plans with no coverage in the doughnut hole, a gap that opens when a senior’s drug costs reach $2,250 and closes when out-of-pocket expenses reach $3,600. By the latest estimates, 3 million to 4 million seniors will hit the doughnut hole this year and pay full price for drugs while also paying drug-plan premiums.

The cost of the program has been lower than expected, about $26 billion in 2006, according to the nonpartisan Congressional Budget Office. The cost was projected to rise to $45 billion next year, but Medicare has received new bids indicating that its average per-person subsidy could drop by 15 percent , to $79.90 a month.

[...]

Proponents say the program avoids that problem by relying on dozens of private insurers, which bid to offer coverage to Medicare recipients. Some offer low premiums and lots of generic drugs, while others have high premiums but offer brand-name drugs and full doughnut-hole coverage. Medicare averages the bids and sets a per-person subsidy. Pressure falls on the insurers to negotiate the best drug prices.

[...]

Limiting choice would be unacceptable to many Medicare beneficiaries, said Senator Charles E. Grassley, Republican of Iowa, outgoing chairman of the Senate Finance Committee. “I don’t think seniors want the government in their medicine cabinets,” he said.

Read the whole thing.

This is one of the reasons lefties hate President Bush so much; even in govt spending, he beats them at their own game.  He gets the benefits to the rightful recipients without overspending, and is even keeping costs from spiraling out of control, which is typical of Dem spending programs.