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Medicare Part D needs to be left alone

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POSTED: November 2, 2012 7:00 p.m.

Democrats in Washington, D.C., aren’t being honest with the American people. Medicare is in big trouble. According to the latest report from the program’s Trustees, Medicare is facing a $38 trillion shortfall and will be out of money in just 12 years.

Currently, 1.3 million Georgians depend on Medicare. We have to do everything we can to preserve the program for them and future retirees. Yet, Democrats have no plan to save the program and continue to chastise Republicans for proposing credible solutions to the imminent crisis. Even as Medicare is foundering, Democrats have raided $716 billion from the program to finance Obamacare.
As if that weren’t bad enough, Democrats are proposing a hidden tax that will destroy the one part of the Medicare program that works: Medicare’s prescription drug coverage, Part D. If Democrats succeed, drug prices for seniors will go up dramatically, and many will find it harder to obtain prescription drug coverage.

Part D was created by Congress in 2003, and as of last year, 29.5 million Americans were enrolled in the program. The success of Part D has far exceeded expectations. The nonpartisan Congressional Budget Office estimates that costs for the program between 2004 and 2013 are going to come in around 40 percent below initial projections.

A government entitlement program coming in under budget is simply unprecedented.

Part D saves money because, unlike other government health programs, it works with private insurers to encourage competitive pricing. To get Part D coverage, seniors take their pick from an array of available options from companies competing for their business. Currently, Part D premiums average a low $30 a month.

Plus, by increasing access to necessary medications, Part D has also reduced the cost of Medicare overall by about $12 billion annually — that’s by helping keep seniors healthy enough to stay out of hospitals and nursing homes, according to the Journal of the American Medical Association.

Unfortunately, Democrats want to undermine the market competition at the heart of Part D. They’re proposing to institute a drug-rebate plan for “dual eligibles,” or those people covered by both Medicare and Medicaid.

Medicaid already has a similar rebate program. It’s needlessly complicated and makes drugs more expensive. Drug manufacturers must give state Medicaid programs a rebate that’s based on a set percentage of the average sales price or the lowest price the manufacturer charges for the medication. This operates like a fee for drug makers, who often find themselves selling their drugs to the government below cost. To make up these losses, everyone else “pay(s) higher prices as a result of the best-price provision in Medicaid’s rebate program,” according to the CBO.

Extending this ill-thought out rebate program to Part D will send costs skyrocketing. A new study by former CBO Director Douglas Holtz-Eakin found that extending rebates further would cause a 20 to 40 percent increase in Part D premiums. A study by the Lewin Group concludes that it could increase premiums by as much as 50 percent.

Health care experts in Washington aren’t mincing words about what this new plan is about — it will amount to a new tax on seniors.

“For a large number of Part D patients, (the rebate is) going to function as a tax. Forcing lower drug prices for a few will dramatically inflate health care costs for the rest,” observed Joseph Antes, a former assistant director for Health and Human Resources at the CBO.

Georgia’s Congressional delegation in Washington needs to stand up to Democrats who want to ruin Part D. Part D is working and should be left alone. We need to fix Medicare without imposing new taxes on seniors.

State Sen. Buddy Carter can be reached at 404-656-5109.

 

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