For all the complaining some politicians make about the cost of Medicare, you’d think they’d be open to any plan to cut costs without cutting benefits. But if you think that, think again.
The last post discussed Medicare Part D, the prescription drug program. Drugs purchased through Medicare Part D cost taxpayers a lot more than the same drugs purchased by, say, the Veterans Administration, because the law that implemented Medicare Part D specifically forbids the government from negotiating with pharmaceutical companies for the best prices.
Allowing the government to negotiate to save money ought to be a no-brainer, but many politicians are resisting this idea, tooth and nail. In a nutshell — instead of looking for ways to cut Medicare cost without cutting benefits, some politicians are looking for ways they can save money by cutting benefits, while keeping subsidies going to the private health insurance industry.
As we go into another presidential election year, it is especially critical to stay informed about these issues. The future of Medicare could very much depend on which politicians control Congress and the White House in 2013. This is a vital interest to mesothelioma patients, since most patients are in or approaching their Medicare years when they are diagnosed.
Now another proposal is on the table that would also save money, but which is being fought by conservative organizations such as the Heritage Foundation. To explain this, let’s go back to 2006, when Medicare Part D first went into effect.
In January 2006, prescription drug benefits became available to all seniors eligible for Medicare. These benefits also were extended to about 6.5 million low-income elderly and disabled citizens who were receiving Medicaid benefits. The 6.5 million were called “dual eligibles,” because they were automatically transferred to Medicare Part D but continued to receive the rest of their health care through Medicaid.
Under the Medicaid program, drugs are purchased by the federal government and by state agencies. The pharmaceutical companies are required by law to sell their drugs to the governments at the “best price,” meaning the government pays no more than the lowest price negotiated with private insurance companies or any other purchaser.
These drug prices are closely monitored, and sometimes drug companies are required to rebate some of the taxpayer’s money back to government if the government finds someone else got a better deal.
But that cost control ended for the 6.5 million patients who transferred to Medicare Part D. The New York Times reported in July 2006 that the pharmaceutical industry was enjoying a windfall of up to $2 billion because of the switch of 6.5 million “customers” from Medicaid to Medicare Part D.
That’s $2 billion additional taxpayer dollars to pay for the same benefit these people were receiving under Medicaid.
Since then, lawmakers have occasionally proposed applying the Medicaid “best price” policy to Medicare, or at least shifting the “dual eligibles” back to Medicaid instead of Medicare Part D for their prescription drugs. This year the Congressional Budget Office projected that such a shift would save taxpayers $112 billion over ten years (see page 54).
So far, lobbyists from the pharmaceutical industry have managed to shoot this down. A provision to shift dual eligibles back to Medicaid was written into the House version of the health care reform act passed last year, but it was taken out of the final version because of pressure from lobbyists.
Recently the shifting of dual eligibles back to Medicaid was proposed in Congress. The reaction from right-wing think tanks like the Heritage Foundation and the American Enterprise Institution was swift, and shrill. Such a shift would cost too much, Heritage cried (huh? saving $112 billion costs too much?). The think tankers argued also that such a shift would mean seniors would get poorer quality care, as if Lipitor works better if you pay more money for it. I don’t think so.
This entry was posted on Friday, July 15th, 2011 at 2:17 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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