Reforming Medicare with a Part D Blueprint
Mar 31, 2013 | 910 views | 0 0 comments | 1 1 recommendations | email to a friend | print

Dear Editor:

President Obama is making Medicare a key topic of the federal spending discussion. Both parties have an opportunity to pursue commonsense reforms that preserve the program while achieving bipartisan support for fixing what isn’t working.

I believe that parts of the Affordable Care Act can conceivably be implemented with minimal dislocation, but only if the right policies are embraced by the administration. That’s why the president is making a mistake in proposing potentially damaging changes to the most effective part of Medicare, instead of building on its progress and finding a way to drive long-term cost savings by keeping seniors healthy.

The Medicare program in question is the Part D drug benefit, which took effect in 2006. Under Part D, seniors choose from a variety of privately run drug plans that negotiate individually with drug makers: seniors pay far less than they used to for coverage.

According to a recent survey, the program has a 90 percent approval rating and will actually cost $334 billion less than original estimates.

Part D works so well because it recognizes the virtues and limits of competition. The existence of the program acknowledges that Americans have a collective responsibility to help older and disabled individuals afford necessary medications. But by prohibiting government bureaucrats from trying to set prices, it leaves individual market players free to devise the best way to meet consumer needs.

The process works so well that the Congressional Budget Office says the government-run negotiations some Democrats want wouldn’t save taxpayers a dime.

Likewise, the misguided “rebate” proposal that President Obama has offered would alter the program unnecessarily. Clearly he means well, but the record shows that it won’t work. The government’s most significant experience with trying to single-handedly run a prescription drug program, the Department of Veterans’ Affairs’ health system, has so many flaws that more than 40 percent of its enrollees end up electing to pay for Part D or other privately provided coverage.

This is why President Obama and my fellow Democrats should capitalize on the important lessons we’ve learned from Part D and make the program their own.

Even with the recent success in holding down Medicare costs, everyone looking at the program overall agrees that its current anticipated spending path can’t be sustained much longer.

Both parties now have an opportunity to drive bipartisan cooperation and reduce health care spending through a proven government program. Seniors will welcome it and Medicare will be in better shape as a result.

Douglas Schoen

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