By now, everyone who hasn’t been living on a desert island knows that traditional Medicare is headed for a fiscal meltdown. However, as I have pointed out before, there is a silver lining to the black cloud.
One segment of the Medicare program in which the market has been allowed to work, the prescription drug program, has been outperforming cost expectations since its inception. Grace-Marie Turner reports:
The Centers for Medicare and Medicaid Services reported that average beneficiary premiums for the standard Medicare drug benefit will increase by just $3 a month in 2009, to $28. That is 37% lower than the $44 a month that legislators estimated seniors would pay this year when the Medicare Modernization Act was enacted in 2003.
And Part-D is easier on the taxpayers than past projections suggested would be the case:
And the drug benefit, based upon consumer choice and competition, also is costing taxpayers less than expected: CMS says it will cost $46.4 billion in 2009 vs. $74 billion that had been estimated for this year.
And why is Part-D costing less than predicted while traditional Medicare is blowing the roof off of the most dire projections?
Competition works, even inside a public program, to give people more choices and keep costs down.
Amen.
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