The Part D Disaster

What’s Truly Alarming about the Medicare Part D Disaster

Privatizes Medicare

For the first time in its 40 year old history, Medicare will pay billions to private insurance companies and force beneficiaries into HMO’s and private health plans for drug coverage.
(Source: Medicare Prescription Drug improvement and Modernization Act)

Forbids Medicare from Negotiating Drug Discounts

Medicare is prohibited from using the buying power of 42 million beneficiaries to negotiate drug price discounts. Allowing price negotiation could potentially save the same amount needed to close the Part D coverage gap or doughnut hole.
(Sources: Medicare Prescription Drug Improvement and Modernization Act; “Doughnut Holes and Price Controls,” Gerard F. Anderson, Ph.D, Dennis G. Shea, Ph.D., Peter Hussey et al. Health Affairs Web Exclusive (July 21, 2004): W4-396-404)

Seniors Will Pay More for Less

With Part D’s monthly premiums, $250 deductible, co-insurance and co-payments, the average senior on Medicare will pay more out of pocket for Rx drugs than they do today without any drug coverage. Forty percent of Part D enrollees will fall into the coverage gap or doughnut hole where they are responsible for 100% of their drug costs.
(Source: Kaiser Family Foundation)

Part D Plan Costs Will Rise Over Time

Part D’s estimated average monthly premium will increase from $32 to $64 in eight years. In addition, the annual deductible is estimated to increase from $250 in 2006 to $437 in 2014 and the coverage gap will increase from $2,850 to $4,984 in the same period.
(Source: Kaiser Family Foundation)

Huge Cost to Taxpayers

Part D will cost taxpayers $720 billion over its first 10 years, with costs reaching $100 billion a year by the middle of the next decade.
(Source: Centers for Medicare and Medicaid Services)

Billion-Dollar Windfall for Drug and Insurance Companies

Drug companies are expected to gain $139 billion in profits from Part D. Medicare has already begun to pay insurance companies subsidies totaling at least $46 billion over 10 years.
(Sources: Alan Sagar, Ph.D. and Deborah Sagar, M.P.H., Health Reform Program at Boston University School of Public Health, October 31, 2003. Available at www.healthreformprogram.org; Office of Management and Budget)