• Is the Medicare drug benefit the next target?

    Of all the components of Medicare, Part D–its drug benefit–is perhaps the best run and the most sensible, though still very far from perfect. Yet, in recent years, inflation in drugs and costs of Part D have outpaced that of hospital and physician costs for the Medicare program. According to today’s Boston Globe (via AP’s Ricardo Alonso-Aaldivar), beneficiaries are going to share in the increase in costs this year.

    Millions of seniors face double-digit increases in Medicare prescription premiums next year unless they shop for less expensive coverage.

    A new analysis of government data finds that premiums will go up an average of 10 percent among the top plans, which have enrolled about 70 percent of participating seniors. That’s according to Avalere Health, a private research firm.

    When will Congress look to Part D for savings? There are some to be had. In particular, plans could be allowed to tighten formularies so they could drive harder bargains with drug manufacturers. Needless to say, this wouldn’t be easy, politically.

    • Assuming the Republicans take back Congress, I would not look for cut backs soon. They have been explicitly seeking the votes of the elderly by claiming they will protect Medicare.


      • @steve – I make no claims about timing. But having done something large on Medicare Advantage, the next place Congress may look is Part D. It could be several years from now. On the other hand, if the GOP regains control, and the White House, FFS Medicare could be the arm that takes the hit.