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A new research study of the new Medicare Part D prescription-drug benefit program by the Center for Economic Policy Research (CEPR) shows pharmaceutical companies will reap receive billions of dollars from taxpayers from the new plan.
The new Medicare Modernization Act (MMA) was written in Congress in such a way that private insurance firms provide enrollee coverage, taking that authority away from the Medicare agency. It is estimated by CEPR taht this change over the next eight years will cost taxpayers at the state and federal level up to $776 billion.
Dean Baker writes in the CEPR report that the design of the new Medicare drug plan "both substantially increased the cost of drugs and administrative costs in addition to making the drug program much more complicated for beneficiaries."
He said one of the major problems is the automatic switching of 6.2 million seniors others from the state-run Medicaid program, to the new Medicare drug plan. While Medicaid requires drug companies to guarantee discounts of 15 percent or more on drugs to the government, the new Medicare drug plan
prohibits Medicare personnel from negotiating lower drug prices.
If negotiations were allowed, the report says, the government could save anywhere from $370 billion to $785 billion over eight years.
A separate Congressional study released in late 2005 showed the average prices for drugs offered by the top 10 Medicare Part D plans were more than 80 percent higher than the prices negotiated by the federal government, and more than 60 percent higher than the prices available to Canadians.
For additional Medicare information, see:
Medicare Plan Benefits Industry, Not Seniors
Official Government Medicare Site
Centers for Medicare and Medicaid Services
American Society of Health-System Pharmacists
Kaiser Family Foundation
Humana Medicare Information
Providence Medicare Information
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