Seniors Can Save on Premiums and Prescription Drugs in 2013
The Star Tribune recently reported that United Healthcare will include “new low-premium Part D plan and preferred pharmacy network that it says will save money for Medicare consumers.” The plan would allow consumers to save on both their monthly premium and prescription co-pays.
Medicare Part D is not without its flaws, but the idea that premium support and a competitive model in prescription drug benefits do not lower costs to seniors is erroneous. Heritage has made a clear case against this and explained that the competitive model does in fact lower costs for seniors. The competition model did play a role in moderating the rise in drug costs in Medicare:
“While cost growth has moderated across the board for prescription drugs, the slowdown has been more pronounced in Medicare. Today, the actuaries at the Centers for Medicare and Medicaid Services project that Medicare prescription drug spending over the first decade of the program will come in about 40 percent below the projections at the time of enactment. At the time of the drug benefit’s enactment, the actuaries issued projections of national health expenditures indicating that total retail spending on prescription drugs for the ensuing decade would reach about $3.5 trillion. In early 2010, the actuaries released new projections for the same 10-year period and put total drug spending at about $2.4 trillion—31 percent below the previous projection.”
The example of United Healthcare and the new low premium plan they are offering, demonstrates that when competition is not restricted, and companies have to vie for consumers’ purchases, prescription drug prices are kept lower. The simple fact is that the evidence lines up in favor of conservative Medicare reform and in favor of premium support, not government dictated price controls.