Benjamin E. Sasse
Congress could learn a lot from Medicare's prescription drug plan for health reform
When first proposed in
Happily, the centrality of choice and competition in this program has led Part D to vastly outperform all budget projections, and conclusively demonstrates that it is possible simultaneously to satisfy beneficiaries and to produce substantial savings relative to any other government program.
The competitive market that the plan's proponents promised would drive down costs has done even better than their estimates. Premiums originally projected to be
All of this means huge reductions in costs for taxpayers. This past March, the Congressional Budget Office decreased its 10-year spending estimates for Part D by
Today, 27 million seniors are enrolled in the program, bringing the total number of American seniors with comprehensive prescription drug coverage up to 90 percent. According to the
So what is going on here? Part of the story is that drugs are less expensive than hospital stays and procedures, which are often unnecessary if patients have timely access to medications. Far better for a patient (and for taxpayers) to have access to diabetes medication than to wait for care until he loses a foot. Preventing more costly care by making drugs affordable for seniors was a key goal of the Part D plan.
A second element of the plan's unprecedented success is choice and competition. At the time of Part D's launch in 2006, critics said that offering dozens of plans made the program too complex for seniors to navigate. To simplify choices,
The lessons are clear--consumers can be trusted to make good decisions. And when incentives are properly aligned, everyone wins.
Medicare Part D is (or should be) a policymaker's dream: a government program that efficiently delivers high-quality services, and does so under budget. Unfortunately, throughout this year's healthcare reform debate, Part D's success has been at best ignored and at worst maligned. Instead of striving to find similar ways to stimulate aggressive competition to create value for consumers and taxpayers, the bill passed by the
This proposal risks doing more harm than good for seniors, but perhaps even more troubling, it demonstrates that some in
These are the solutions that could--and should--be applied in the health reform package currently being considered in the
There is very good reason to believe that patient-empowering solutions work better. One already does.
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Healthcare - Why Medicare Part D Is the Answer to Health Reform
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