Two important reports about Medicare Part D came out this week and reaffirmed once again that the program is a success. Each year, Medicare Today and KRC Research conduct a survey of Medicare Part D beneficiaries every year and this year’s results showed it continues to be extremely popular with 86 percent of seniors saying they are satisfied with the program. The Congressional Budget Office also issued a report titled “Competition and the Cost of Medicare’s Prescription Drug Program.”
The CBO report showed that competition within the Medicare Part D program is an important part of how the program has held down spending and remains successful overall. In fact, the program continues to operate at a cost significantly lower than initial projections – nearly 50 percent below what CBO projected when the program was created. The report also pointed out flaws in proposals to import Medicaid-style rebates for medicines purchased by low-income Part D beneficiaries that have been pushed by President Obama and others. The CBO acknowledged that implementing Medicaid rebates in the Part D program may decrease the cost of some drugs in the short-term, but it is not a permanent solution to lowering costs of prescription drugs and may reduce choices for seniors, reduce incentives for innovation and increase premiums.
As I’ve said before, Medicare Part D should be looked at as a model for reform and the results of these two reports confirm that to be the case. Real competition and real choices lead to real solutions for affordable and accessible healthcare.
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