In the wake of the Affordable Care Act (ACA), healthy, hard-working Americans are facing higher health care costs and a sea of broken promises. Higher premiums, lost providers and plans, as well as increased prescription drug costs are among the negative side effects stemming from ACA implementation.
Amid the ACA fallout, efficient and already successful health care programs are at risk from interference. Medicare Part D, a prescription drug coverage program for seniors and disabled individuals, is the all too rare example of a successful government program. What makes this program work is the market-driven principles and competition built into its design. As a result, program subscribers have access to prescription drug benefits that are offered at substantial savings while simultaneously saving taxpayer money. Over 30 million are enrolled in Medicare Part D, chances are you know someone who is.
From a fiscal perspective, Part D should be viewed as a windfall for our national budget. According to the Congressional Budget Office (CBO), from 2004-2013, government spending on the program was 45 percent, or $348 billion less than originally projected. Unfortunately, myopic Beltway bureaucrats annually target Part D during the budget process and will again attempt to strip the market-driven components that make it efficient and widely popular among seniors and disabled veterans.
This is the real head-scratcher: Why then would the Obama administration undercut Part D when it is working efficiently and coming in under budget? It is dumbfounding. Yet, the federal government continues to look for ways to undercut Part D reducing the number of available plans, asserting price controls and instituting a rebate program that would reduce pharmaceutical research and development of new products.
Centralized, government-controlled price fixing is not the answer, and it would only drive prices higher. Furthermore, this is inconsistent with market-based reforms that promote competition and consumer choice. With Part D, prescription cost increases have held steady with the rate of inflation, and seniors have options from a variety of plans to select one that best suits their individual needs. So, rather than undermine Part D, the market-driven approach should be championed as an example of what is working in federal government.
The benefits of Part D extend beyond the fiscal savings. By improving access to prescription drugs, the overall health condition of beneficiaries is improved, decreasing hospitalization rates is realized. According to a Harvard study, Medicare Part D significantly reduced the likelihood of hospitalization for eight conditions, leading to nearly 4 percent fewer hospital admissions, or an estimated 77,000 fewer annual admissions.
While mounting evidence exists to save Part D, it is far from safe. It will likely be on lawmakers’ and regulators’ radars yet again. It is critical that we continue to defend and maintain Medicare Part D. Instead of derailing its success, the federal government should model other programs after Medicare Part D. As the numbers show, the security of Part D is not merely a concern for seniors and the disabled population. It impacts us all. The bottom line is that centralized, government-controlled price fixing is not the answer. All taxpayers benefit from Part D, and Washington, D.C., should stop its pattern of fixing something that is not broken.
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