By Gary E. Applebaum
Wednesday, April 29, 2009
Before President Obama and his team overhaul the American health care system, they should note what currently works.
Consider Medicare Part D. This prescription drug benefit for seniors has a huge price tag, but by allowing the market to set prices, Part D has actually reduced costs and improved services for seniors.
Under Part D, seniors select a prescription drug plan offered by a private insurer. The federal government subsidizes these plans, and insurers compete to offer seniors the best deal. Competition among insurers drives down costs to enrollees and provides them with multiple choices so that they can pick a plan that suits their medical needs and budget.
Medicare Part D stands out as a rare success among the scores of bloated, inefficient government programs we encounter on a daily basis. It has managed to deliver great service to its beneficiaries — at a fraction of the projected cost to taxpayers.
The Congressional Budget Office put the original 10-year price tag of the program at a whopping $634 billion. Premiums for a standard plan were projected to be $44 by 2009.
CBO recently revised its 10-year estimate of Part D’s cost down to $395 billion. And today, standard plan premiums are $28 — 37 percent less than anticipated.
Seniors have also been tremendously satisfied. Of the more than 25 million seniors enrolled in Medicare Part D in 2008, 87 percent expressed satisfaction with their plans, according to a Harris Interactive Poll. In fact, three-quarters of seniors said that their plan saves them money.
Part D is also lowering health care costs nationally.....
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