The Unnoticed Success Story in the Medicare Trustees Report
August 10, 201011:02 am
The predominant headlines emerging from the release last week of the Medicare trustees report was that the longevity of the Medicare program has been ostensibly increased as a result of the new health reform law.
There’s a story of consequence, though, in the trustees report that was overlooked. In looking at the Medicare Part D prescription drug program, the trustees lowered their estimates of future spending from where they had it in last year’s report. This reduction is particularly striking when you consider that there will be additional dollars spent on the program in order to close the so-called “donut hole.” Even with the donut hole closure, Part D expenditure estimates still declined.
This further underscores what many of us have said from the beginning about the efficacy of the Part D structure. Making consumer choice the centerpiece of the program, and having multiple prescription drug plans compete for the loyalties of beneficiaries, generates greater value. This competition-and-choice approach, combined with increased use of generic pharmaceuticals, is placing downward pressure on spending estimates for future years.
The costs of the Part D program felt by senior citizens also continue to fall below original estimates. The average monthly premium for 2010 is $30. Original government estimates projected they would reach $50 by this point.
It’s no wonder the program enjoys nearly 90 percent approval ratings – almost unheard of for a federal initiative.
The Medicare Today coalition issued a press release on the Part D findings.
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