Medicare

In just the fourth year of the Medicare prescription drug program, 90 percent of all beneficiaries now have comprehensive prescription drug coverage. Through Medicare Part D, about 14 million seniors and disabled Americans, who previously were uninsured or lacked comprehensive prescription drug coverage, now have access to needed medicines.

The Medicare prescription drug program was designed to achieve cost savings using a competitive market among private prescription drug plans, all overseen by the Centers for Medicare and Medicaid Services (CMS). This approach has led to significant savings on medicines for Part D enrollees and a lower-than-expected cost for America’s taxpayers.

These cost savings have been achieved through the program’s competitive structure. Drug plan sponsors are negotiating large discounts, rebates and other savings on medicines as high as 29 percent, according to the Medicare Trustees Report.

Beneficiaries enrolled in a Part D drug plan are saving, on average, $1,200 annually on their medicines, according to the CMS. In addition, low-income seniors are seeing, on average, $4,000 a year. What’s more the latest Congressional Budget Office cost projections for the program estimate Part D is costing $520 billion less than originally forecast.

Also, through expanded coverage achieved in Part D seniors have increased access to medications for chronic diseases for which under use has been a problem. For example, beneficiaries with diabetes enrolled in a Part D drug plan filled 11 percent more prescriptions after Part D began.

Seniors who are experiencing unprecedented access to medicines and cost savings are highly satisfied. A recent survey by Medicare Today reported that 84 percent of seniors enrolled in Medicare Part D are satisfied with the program – an increase of 6 percent since the benefit began. A separate survey by WSJ Online/Harris Interactive reported that 87 percent of Part D enrollees are highly satisfied.

While Medicare Part D is clearly a success story, every program has room for improvement. For example, the coverage gap, otherwise known as the “doughnut hole,” has been a burden for some seniors. As part of comprehensive health care reform, biopharmaceutical research companies have made a commitment to the White House and the Senate Finance Committee to help most seniors who are affected by the gap in coverage. Under the proposed legislative program, biopharmaceutical companies will provide a 50 percent discount for brand-name prescription medicines in the coverage gap for most seniors and disabled.

While we support reform, we also believe it should not undo successful health care programs or sacrifice patient care. Reforms such as helping to fill the coverage gap give America’s seniors and disabled the ability to lead healthier, more productive lives and illustrate that improving coverage can be done efficiently through successful, existing market mechanisms while maintaining incentives for innovation. At the end of the day, health care reform should make our country healthier.

Medicare and You: 2009

2009 Medicare Trustees Report