Medicare Premium Support: Seeing Through the Lies

Heritage Action’s Medicare website, which thoroughly dismantles the left’s lies about conservative Medicare reform, shows that competition can and does control Medicare prescription drug benefit costs.  In 2003, Congress was debating what a twenty-first century Medicare prescription drug benefit should look like.  As usual, there were multitudes of fundamentally different views.

During a hearing about the Medicare prescription drug benefit before the Subcommittee on Health in 2003, Reps. Henry Waxman (D-CA) and John Dingell (D-MI) demonstrated little faith in the free market.  Rep. Waxman said:

 “It amazes me that those who seem so enamored by competition as a model for our healthcare system are determined to give a competitive edge to private plans by refusing to put a good drug credit in the traditional Medicare plan. Are they afraid that the reform people want in Medicare is the addition of drugs to the basic program? I believe the answer… is yes.”

Rep. Dingell added:

“I question whether the private sector is more efficient, and there are other concerns aside from efficiency that we should have at the forefront when thinking about Medicare–quality, equity, stability and compassion–something that private companies are not always in the business of providing.

 I would note that excesses of the HMOs have been, quite frankly, recognizable best as not infrequently stupidity, and crass disregard of the well-being of their beneficiaries, or not infrequently just plain cold-hearted, flinty-eyed indifference to the needs of their patients, and abandoning hundreds of thousands of senior citizens who were silly enough to believe the promises that were made by the HMOs, which got them in the first place and out of regular Medicare.”

Apparently being in the private sector automatically makes you “cold-hearted” and “flinty-eyed.”  And of course, senior citizens are “silly” enough to trust private companies instead of those fuzzy warm people in the Capitol building.

Unfortunately for the liberals, their emotional rhetoric (which was blatantly insulting to seniors) is simply not supported by fact or numbers.  In fact, a 2008 Republican committee staff report made the following astute observation about premiums for drug benefits:

“The average premium will “go up” this year to $25. This owes more to the government refining how it defines “average” for such a large, varied pool than to actual price increases by Part D providers. Moreover, the “higher” price is still far lower than CMS projected two years ago of $41 per month. And it even lower than the $35 premium Democrats wanted to statutorily mandate for 2008 back when the program began. In fact, if Democrats would have had their way, the average senior would have paid $132 more in premium costs in 2006 and $156 more in 2007. This is why the [Democrat] Majority’s sole focus on the price of prescription drugs fails to capture all the ways Part D providers work to lower the overall cost of providing prescription drugs to America’s seniors.”

Moreover, in 2011, James Carpetta explained just how farcical liberal logic is:

“At the time of enactment, the competitive drug benefit design had many critics.  Some argued that the program would not work because private plans would decline to participate without a guaranteed share of the market. Others said that beneficiaries would not sign up for it because the competitive structure was too complex to navigate. Others said that program costs would explode without government-regulated price controls.

All of these predictions proved to be wrong. Now in its sixth year of implementation, the program has exceeded all expectations. Some 90 percent of Medicare participants are in secure drug coverage of some sort, and public opinion surveys show that they are very satisfied with their insurance. Most important, the program is coming in way under budget, with costs over the first decade running 42 percent below estimates at the time of enactment.”

It looks like the liberals are the silly ones in this picture, not seniors.

American seniors have been able to save money on their Medicare prescription drug plans, despite having people like Waxman and Dingell in Congress.  Had they prevailed in 2003, seniors would be paying significantly more.

When conservative, free market principles inform health care policy, seniors benefit.  On the contrary, when the government tries to manipulate health care through price controls, seniors suffer and the quality of health care diminishes.  As the debate over conservative Medicare reform continues, lawmakers, pundits and citizens would be wise to remember this debate.


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