The Senate has set dates for Medicare Part D hearings, and not a moment too soon:
Medicare officials will testify before the Senate Committee on Aging on Thursday about how they are addressing various problems with the Medicare prescription drug benefit, the Washington Post reports. According to the Post, many lawmakers "got an earful" from beneficiaries about the drug benefit while visiting their districts over the winter congressional recess, and they will now consider whether to make legislative adjustments to the program or "wait and see whether the glitches work themselves out." Lawmakers' "big concerns" with the drug benefit include the "dizzying array" of drug plans from which beneficiaries can choose and the "coverage breakdown" for beneficiaries who are eligible for both Medicare and Medicaid, the Post reports. Next Wednesday, the Senate Finance Committee will address the drug benefit in a follow-up hearing to a meeting last week with committee members and HHS Secretary Mike Leavitt.
The question here is what legislators can come up with for long term viability. As I discussed over at TPMCafe, not enough seniors have enrolled so far, or are planning to by the May deadline. But the May deadline isn't the problem -- it's the program itself.
There are several options, most not very likely and some extremely unlikely. The grandest option, of course, would be to repeal the whole thing and start from scratch. I think we all accept that's more of a "when pigs fly" kind of likely.
Baker, clever economist that he is, compared Medicare Part D's projected pharmaceutical costs to Congressional Budget Office data on what other countries pay. In 2006, Medicare beneficiaries will spend an estimated $113 billion on drugs. If their costs were equivalent to the next most expensive country, they'd be paying only $86 billion. If they got the prices of the cheapest country, they'd spend $61 billion. And if, as one would expect, they used their larger size to get proportionately larger savings, they'd only spend $42 billion. Over a seven year projection, the standard benefit would cost $1.361 trillion, the high estimate in a single-payer system would cost $834 billion, the middle estimate $602 billion, and the low estimate $418 billion. And those numbers include adjustment for increased drug usage due to lower costs. Add in, too, the $38 billion savings in administrative costs and you've got quite a chunk of money -- in the optimistic estimate, almost a trillion dollars -- the Bush administration passed up on.
So a cool trillion or the program's total collapse? Unfortunately the Administration, unlike AARP, probably won't be doing an about-face on that policy anytime soon. I hate to be doomsday about this, but it seems like the only solution we can expect to see right now is an extension on the enrollment date until Dec. 31st, but that won't fix a thing. Unless we see some kind of turn around in the 2006 elections, the program is probably doomed. Premiums will rise, but it will take a few years for it to totally collapse, and take its place history as one of many failed U.S. health care experiments.