August 10th, 2011

The Washington Post shares the story:

What does a 76-cent decrease in Medicare drug premiums say about the future of health policy?

That’s been the subject of much debate, ever since news broke last week that Medicare’s Prescription Drug Benefit premiums would drop from $30.76 in 2011 to $30 in 2012. This will be the first drop in premiums in the program’s six-year history.

The Medicare Prescription Drug Benefit, or Part D, is the only Medicare program delivered entirely by private insurers. The slight dip in premiums has set off a new round of debate about how private insurance fits into Medicare. Mother Jones’ Kevin Drum has gone as far as to declare Part D’s success a “neoliberal dilemma.”

Run the slight premium decrease by health policy experts on both sides of the Part D debate, and you get a much more measured response: while Medicare Part D has served its target population well – much better than Democrats initially projected – it does not necessarily lay the groundwork for private insurance in the rest of Medicare.

Part D has, by most measures we’d judge an insurance program, been successful. It increased seniors’ prescription coverage: from 66 percent in 2004, before Part D launched, to 90 percent by 2009. The program is “welfare generating:” in a 2008 study, Boston University’s Austin Frakt found that every dollar of benefit that seniors got from the program only cost the government 71 cents. Public polls show that seniors generally like it.

For the rest of the story, read The Washington Post