Medicare Part D has cost the government 30% less than expected this year--a savings of $13 billion--which the Bush administration attributes to competition among insurers offering the drug benefit. But according to figures the Associated Press received from the Centers for Medicare and Medicaid Services, market forces accounted for only $6.9 billion of the savings, while lower-than-expected enrollment in the drug benefit program has resulted in savings of $7.5 billion and slower growth in drug prices accounted for $3.7 billion in savings. Spending on catastrophic drug expenses offset the total savings to $13 billion.
“Republicans would have you believe that the drug and insurance companies have sacrificed profits in the name of competition, but nothing could be farther from the truth,” Rep. Pete Stark, D-Calif., told the AP. “In fact, the dirty little secret is that costs are lower because of low enrollment and a slowdown in drug spending.” But the fact that there were significant savings in Medicare Part D may present an obstacle to Democrats’ touted goal of passing legislation to allow the federal government to negotiate directly with pharmaceutical companies for lower drug prices, according to the AP.
