Medicare part D—the prescription drug coverage plan of Medicare has been on show for several months, and the enrollment deadline, May 15, has been passed. More than 31 million beneficiaries have enrolled in one of their local plans or government standard plan, though more than 8 million people are still left behind.

Given the pessimistic prediction mostly by democrats that many beneficiaries will have trouble in enrolling in the drug program, the above news is great. The new drug plan is, by and large, rolling on.

So in this week’s New England Journal of Medicine, the administrator of Center for Medicare and Medicaid Services (CMS) presented an optimistic report to cheer the American public[ref 1]. The figures, numbers, and phrases are as encouraging as one can get. However, in the same issue, state-women Louise M. Slaughter (D-NY) reviewed the struggles during the unforgetable drug bill fight, and harshly criticized the republicans in abusing the legislation process[ref 2].

In her article, Louise testified that democrats were completely defeated during the bill fight. Their amendments were rejected by the House Committee, they were excluded from panel discussion between House and Senate, and their attempt to block the vote was futile due to the republican majority. On the other hand, many republicans involved in the bill preparation were corrupted. Some accepted million dollars’ lobbyist positions after the bill was passed. The result was a deeply flawed bill, but was still acclaimed as one of the achievements of G. W. Bush administration.

The Medicare part D plan is a comprehensive and complicate plan. It covers needed prescription drugs for Medicare beneficiaries, namely those with age greater than 65. Most of these people are taking multiple pills daily. Thus a generous drug plan is essential to relieve their financial burden and to improve their quality of life. But why does it take so long to get this bill settled down?

Since 1965 when President Johnson penned down the Medicare bill (in fact as one article of social security bill), the drug coverage idea has been lingering in every discussion about Medicare renovation. But as always, the House, the Senate, and the Presidents represent and are influenced by interest groups. Often other Medicare problems overwhelmed the drug coverage problem so that the drug coverage was seldom successfully brought to the Floor. It was President Reagan, a hypocritically charming president, who cheerily passed the Catastrophe Medical bill in 1987. Unfortunately, the bill indeed had catastrophic effects—it was repealed the next year due to the strong objections from almost all groups: ranging from retired people to insurance industry. The embedded drug coverage died with that bill.

The most audacious attempt in changing health policy was initiated by Hillary Clinton in the early 1990s. She, together with other aggressive democrats, proposed a comprehensive universal health insurance plan for all Americans. Needless to say, it encountered a tremendous resistance and died before the House or Senator voting. Again, drug plan died with it.

Eventually, almost all politicians realized that an affordable drug coverage plan for Medicare beneficiaries is an appealing political proposal to tout votes. First, it is not too grand to be feasible; second, it is imminently important given the skyrocket increase of drug cost; third, it has been discussed quite thoroughly and both parties have some plans about it.

However, the proposed drug coverage plans differed drastically between two parties. Democrats preferred a downscaled universal health plan in which old people would only pay a minimum premium and deductibles and could enjoy a broad coverage of drugs without hidden fees and private intermediates. On the other hand, republicans proposed a plan not unlike a private plan. Private sectors will be the front to implement the drug plan, while government will serve as an administrator and regulator, but not an executor. For any beneficiary, he/she will have choices to choose which private plan as their drug coverage plan, or to choose the government standard basic plan (that is, the government plan is one of many choices for the beneficiaries). It is called competition.
The standard plan will cover the low end of drug cost (with some deductibles), and then the coverage abruptly ended at $2,250. The drug coverage will again pick up the drug cost after $3,600. This “doughnut hole” is certainly innovative because it leaves room for private insurance plans to cover this hole. It is an incentive for private companies to enter the drug coverage market.

The drug coverage bill also prohibits the government from negotiating drug price with pharmaceutical industry—a sure sign of corruption from the democrat’s point of view. However, since most drug coverage will go through the private plans, private plans can negotiate the drug price with drug companies. However, critics warned that the negotiating power of private sectors may be not as large as that of the government.

Nevertheless, as reported by the CMS, the implementation of drug program has gone very well. Most elderly people finally have some drug coverage (although some have it through their old insurance plans or employee benefit anyway). Time will tell whether the worse scenario will happen or not.

Reference:

[1] Bach P.B., McClellan M.B.. Medicare Part D: The First Months of the Prescription-Drug Benefit — A CMS Update. NEJM 352(22). http://content.nejm.org/cgi/content/full/354/22/2312
[2] Slaughter L.M.. Medicare Part D — The Product of a Broken Process. NEJM 352(22). http://content.nejm.org/cgi/content/full/354/22/2314