If you asked the average American what medicare part d is, they probably wouldn’t have the foggiest idea. Here’s what it’s about.
Individuals who have Medicare are eligible for prescription drug coverage under a Part D plan. Beneficiaries of the plan can obtain Part D in two ways, #1. if they join a Prescription Drug Plan through a private insurer, or if they join a Medicare Advantage plan. In 2006, Medicare Part D was passed into law by then-President George W. Bush. It was supposed to make it more convenient for seniors to subsidized the cost of prescription drugs.
However, Medicare part D is greatly flawed, in that the federal government is prohibited from negotiating the price of prescription drugs with pharmaceutical companies. By contrast, the Department of Veterans Affairs, which is allowed to negotiate drug prices, pays 58% less for drugs, on average, than Medicare Part D. For example, Medicare pays $785 for a year’s supply of Lipitor (or Atorvastatin), while the VA pays $520.
Former Congressman Billy Tauzin of Louisiana, who was one of the bill’s co-authors and steered the bill through the House, retired soon after and took a $2 million a year job as president of Pharmaceutical Research and Manufacturers of America (PhRMA), the main industry lobbying group.
Another, Medicare’s boss at the time Thomas Scully, who threatened to fire an assistant if he reported how much the bill would actually cost, was, in fact, negotiating for a new job as a pharmaceutical lobbyist as the bill was working through Congress. In all, a total of 14 congressional aides quit their jobs to work for the drug and medical lobbies immediately after the bill’s passage.
As a result, Medicare Part D stands to cost the government nearly $520 billion dollars in excess, costs that are not accounted for in then-President Bush’s budget. President Obama wants to close the loophole by proposing a plan to reduce costs for recipients from 100% to 50% of these expenses. The cost of the plan would be borne by the drug manufacturers for name-brand drugs and by the government for generics.
Of course, the GOP-led house is against the proposal.