February 2, 2007

Medicare Rx Smoothly Enters Year Two

The start of Medicare prescription coverage's second year has proven even more successful than its inauguration.

• The Medicare Part D drug benefit was brand new one year ago. Its first year was a major success, but it began with a few bumps in the road.
   
• The program's recent 45-day open enrollment period ended December 31.  All indications are that it went off without a major hitch.
   
• Which makes it all the more bewildering that some lawmakers and interest groups insist on making significant changes to a program that is both popular and effective

Medicare Part D has succeeded at providing more seniors with drug coverage – and affordably so. Seniors are happy with the benefit they now enjoy.

• Before the Medicare Modernization Act took effect, less than half of Medicare beneficiaries had adequate drug coverage.  Today, 39 million have prescription coverage.  That's over 90 percent of all eligible people.
   
• Beneficiaries are saving an average of $1,200 a year – that's $100 a month.
   
• Since the end of May, more than 1.4 million people have joined one of Medicare's drug plan options.
   
• This year's Part D monthly premium – $22 – averages even less than last year's.  Last year's average premium was just $23, well below the estimated $36 amount.
   
• More than 10 million Americans with low incomes now have drug coverage through Medicare.
   
• Five different surveys have shown that more than three-fourths of seniors are satisfied with the Medicare drug program.  The best indicator? Only 10 percent of beneficiaries voted with their feet to switch to another plan.

Medicare officials have ironed out the kinks.  Seniors have the power and choices of consumers.

• This year, there have been virtually no access problems at pharmacies.
   
• The much-fretted "doughnut hole" has had little bite.  That's because about 90 percent of beneficiaries chose a drug plan that offers better coverage than the standard benefit – including plans that continue coverage through the gap.
   
• Few employer-sponsored plans stopped offering their retiree drug benefit.
   
• Part D costs are 42 percent lower than original estimates. Of the $113 billion in savings over the next decade, $96 billion results directly from the competition the program provides.

It would be foolish to change such a highly successful program as Part D of Medicare.  This dream-come-true could morph into a nightmare.  Putting the government in the price-setting business would hurt seniors, upset their current coverage (likely resulting in fewer prescription medicines being available, long-term higher prices or worse) and lead to other unintended consequences.