If you’re growing anxious about what kind of deal will be struck over the debt ceiling, join the club. And you should be anxious. At the moment, it appears the “deal” will result in either not raising the debt ceiling — which most economists believe could cause a financial disaster of unprecedented proportions — or that President Obama will be forced to accept steep cuts in Medicare, Medicaid, Social Security, and many other programs to appease Republicans into raising the debt ceiling.
Interestingly, the one part of Medicare many Republicans seem to want to keep as it is, is Medicare Part D. But others argue that Medicare Part D is one part of Medicare that easily could be less costly without cutting benefits.
Medicare Part D is the prescription drug benefit. It was signed into law by President George W. Bush in 2003, and it went into effect in January 2005. In 2010, 27.6 million Americans were enrolled in Medicare Part D, and most of these beneficiaries tell pollsters they are satisfied with the program. Seniors have come to rely on all parts of Medicare to help them face the health challenges of the senior years, which includes higher rates of cancers such as mesothelioma and other devastating diseases.
Very simply, Medicare Part D is a program in which the government pays private insurance companies to design and administer prescription drug insurance plans for seniors. Seniors may choose among a variety of plans they believe best fit their needs. Taxpayers pick up about two-thirds of the cost of the plans, and seniors also pay premiums.
Critics of the Medicare Part D program say it costs more than it should. By law, the government may not negotiate with pharmaceutical companies to lower prices, as other federal agencies do. For example, in 2007 the Department of Veterans Affairs paid 58 percent less for the same drugs than Medicare Part D. A year’s supply of Lipitor cost the VA $520, but when purchased through Medicare Part D the same number of the same pills cost $785.
But others want the program to stay the way it is. They argue that the current program gives seniors a wide variety of plans that fit many budgets and needs, which probably would not be true if it were administrated by the government.
To claims the program is too expensive, proponents say Medicare Part D is costing less than the Congressional Budget Office originally estimated. When the law first passed in 2003, the CBO projected that it would cost $552 billion in its first ten years, from 2004 to 2014, but right now it appears the cost will be closer to $385 billion. Some politicians attribute this $167 billion “savings” to the miracle of competition and private free enterprise.
The critics say the difference between estimated and actual cost is not a “savings”; it only means that the CBO made faulty assumptions in its original estimates. Meanwhile, the program has become hugely profitable to the pharmaceutical industry. Several of the lawmakers who crafted the original legislation have left Congress and are now lobbyists for Big Pharma. Their chief assignment is to keep Medicare Part D in the hands of private insurance.
This entry was posted on Friday, July 8th, 2011 at 7:59 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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