Bush’s Medicare Drug Program Fails to Cut Costs

by Tula Connell, Aug 29, 2007

The first report card on Bush’s Medicare prescription drug program is in—and it shows a failing grade for controlling the cost of medication for seniors.

Seniors in Medicare’s Part D prescription drug program are more likely to pay at least $300 a month for medicines than those on other plans, according to a study published by the journal Health Affairs.

Hat tip to the Alliance for Retired Americans for highlighting the study, which reports that experts consider the poll of more than 16,000 seniors, performed by the Kaiser Family Foundation, the Commonwealth Fund and the Tufts-New England Medical Center, the closest thing yet to a “report card” on Part D.  Further:

The study found that eight percent of seniors in the government’s Medicare plans spent $300 or more out-of-pocket for drugs, compared with 5 percent for both those covered by the Veterans Affairs Department, which negotiates prices for drugs it covers, and those covered by workplace insurance.  Medicare recipients were also more likely to delay or forgo filling prescriptions because of the expense, with one in five enrollees saying they had put off or even skipped getting some medications because of Part D’s high costs. Part of the reason so many beneficiaries are having difficulty paying for their medications is that many low-income seniors apparently do not know that they can get additional government subsidies to lower their costs, the survey indicated. 

Part D, the voluntary prescription drug program, went into effect in January 2006 and is provided only through private plans, either stand-alone prescription drug plans or through a Medicare Advantage plan. Congress passed the Medicare drug legislation by a slim margin—and several lawmakers likely would not have voted for the bill had they been told the true cost. While the Bush administration claimed the legislation would cost $400 million over 10 years, Congress learned that Medicare’s chief actuary had estimated the true cost of the program at $534 billion.

Democrats in Congress have proposed expanding the number of low-income seniors eligible for such subsidies by cutting overpayments to private Medicare Advantage plans and say the new findings show the benefit is not working well for those who need it most: seniors who have several chronic illnesses and must take a number of medications.

Says Alliance for Retired Americans President George Kourpias:

 What we have in this report is incontrovertible evidence that prohibiting the government from negotiating lower drug prices has hurt seniors. 

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