Medicare Part D - 5/27/08

Five years ago, the federal government began subsidizing the costs of your medications under Medicare Part D.  That program has been a big help to you, right?

On Golden Opportunities, we tell you the truth... the real truth.  So here it is: Medicare Part D has been a huge benefit...for the drug companies.  But for seniors, for most people, it's been much less helpful.  That's because skyrocketing prices have eaten up much of the benefits.  And the increasing prices are due, in no small part, to what Congress included, and did not include, in the Part D program.

According to the AARP, the prices of 220 of the most widely used drugs went up 7.1% in 2006, and 7.4% in 2007.  Prices are going up 40% faster than they did before Medicare Part D was adopted.

Let's say your drugs last year cost $5100.  Under Part D, the government would have paid about $1500.  You would have paid about $3600 for the medications, plus premiums of perhaps $400.  So the government benefit to you would have been about $1100.  But did you really save $1100?  No!  With or without, the Medicare Part D program, you might have paid about the same price for those same drugs.

What has gone wrong?  The federal government is putting billions of dollars into drug subsidies, with no incentives for these companies to keep costs down.  In other words, the Part D program has contributed to skyrocketing price increases, which directly add to the costs consumers must pay.

When Congress created the Part D program, it could have very easily created competition, which would have kept prices down.  For example, Congress could have allowed people to buy their medications from Canadian pharmacies.  Prices for drugs from Canada are often half the price of the same medications sold in the U.S.  And the federal government could have used its huge market power to negotiate lower prices with the mammoth drug companies participating in America's Medicare and Medicaid programs.  But Congress failed to create those safeguards for consumers.  In fact, Congress explicitly prohibited government agencies from negotiating lower costs.  And the result?  Drug prices are skyrocketing.  And we're all paying the price.

Medicare Part D could have been a great benefit to seniors with high medicine bills.  But instead, the program provides only modest help for most seniors, while significantly adding to the bottom lines of the drug manufacturers.  And that's just not good medicine for Americans.