Sunday, November 26, 2006

Dems cheaper drug plan good campaign issue but

Politics: A lot harder to make a reality. I applaud the Washington Post's analysis of the Dems plan after the election. What a surprise.

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. House Democrats have vowed to act quickly after taking power in January to lift a ban on Medicare negotiations with drugmakers, which they hope will save as much as $190 billion over a decade. But House leaders have yet to settle on a strategy and acknowledge that negotiation is, in any case, unlikely to generate sufficient savings to fill the "doughnut hole," the much-criticized gap in coverage that forces millions of seniors to pay 100 percent of drug costs for a few weeks or months each year.
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 in 2007, to $79.90 a month.
Republicans, by and large, did a poor job of defending the program, said Thomas A. Scully, a Republican and the former head of the federal unit that runs Medicare. He played a key role in creating the drug benefit. "Black voters, poor voters -- people who generally vote Democratic -- they got the biggest benefit in 40 years and nobody told them that," Scully said.
Here is the kicker.
For now, it is not clear how aggressively Democrats are willing to push price negotiation. Ideas range from simply repealing the ban on negotiations -- which would accomplish little if the Bush administration refuses to negotiate -- to creating a separate, government-run Medicare drug program with strong negotiating power. Rep. Fortney "Pete" Stark (D-Calif.), who is in line to become chairman of a key health subcommittee, said he prefers a middle path, with Medicare setting ceilings from which private insurers could negotiate downward. But Sen. Max Baucus (D-Mont.), the incoming Senate Finance chairman, is cool to the idea of government negotiation, and has committed only to holding hearings to "determine what the result would be of eliminating" the no-negotiation clause.
Read the whole thing, the gist is while it made for a great campaign issue, the program is working well now and more government involvement might wreck the whole thing. I see the Dems doing style points just to say they did something.

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