If It Ain’t Broke, Don’t Fix It

By October 3, 2012Health Care

Congress will return after the elections for a lame-duck session and there will be big issues on the agenda. They will have about five weeks to come to some agreement on how to avoid the “fiscal abyss” we face on January 1, 2013.  The NAM has opposed sequestration because of the serious implications it has for our national defense and other important functions of the federal government. What has received little attention is the effect the sequestration will have on some other important programs – programs that are popular, successful, and under-budget. The Medicare Part D program is, perhaps, the best example of such a program.

Medicare Part D was enacted in 2003 and fully implemented in 2006 so we have about seven years experience from which to draw conclusions about the success or failure of the program from a beneficiary’s eyes as well as the government’s checkbook.  According to figures from the Congressional Budget Office (CBO), the program is coming in 43 percent – or $435 billion – below initial projections, making it the rare government program that has delivered as expected while costing billions less than forecasted.  In fact Part D saved about $1,200 in one year in lowering hospital, skilled nursing facility and other medical costs for each senior previously lacking comprehensive prescription drug coverage.  Coupled with other research showing that nearly 11 million seniors gained comprehensive prescription drug coverage, this represents annual savings of over $13 billion.  In addition a satisfaction survey released today by Medicare Today found that more than 90% of beneficiaries are satisfied with the program and three of four seniors said the program works very well.

Medicare Part D is a successful partnership comprised of the federal government, private providers, employers and beneficiaries. Yet, Medicare Part D is subject to reductions under the sequestration plan unless Congress comes up with an alternative during the five weeks between the elections and the holidays. Clearly, a distinction can and should be made between those programs that are working effectively and those which are not. Medicare Part D is working. Congress and the President should recognize that and look for ways to replicate its success instead of looking to change and limit its effectiveness.

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