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"All Star Panel" Ignores Downside of Medicare Part D

Reported by Janie - November 22, 2006 -

During the "All Star Panel" on "Special Report" last night (11/21) the Bush lackeys sat around extolling the wonders of the Medicare Part D program, while bashing the Democrats and their plan to negotiate with drug companies. In fact, right-wing pundit Fred Barnes feels Medicare can't be made any better since he "can't think of anything where the market has worked so well to drive down prices with this competition."

The panel included Nina Easton, Mort "Toto" Kondracke, and Fred Barnes. After introducing his guests and feeding lines to Easton, host Brit Hume turned to Kondracke for his opinion.

MK: "JD Power & Associates , the consumer satisfaction people, have surveyed this and 75% of seniors have said they are happy with prescription drug Part D, the prescription program as it exists."

BH: "That may mean they're happy with the help they're getting, but that doesn't mean they feel they're paying fair prices."

MK: "Well, they're paying lower prices than anyone expected. The average premium was expected to be $34 a month, for average Medicare premium, it's down to $27 dollars a month."

BH: "And this gives them an insurance policy that pays for their drugs."

MK: "Exactly. Look, what I'm tempted to say, and I will say is Milton Friedman has passed away in more ways than one. I mean, the Democrats do not believe in the private market, private competition. The way the Medicare prescription drug plan works is that private insurance companies negotiate formularies with these various drug companies, and they have lowered the price from what was expected…"

BH: "So the insurance companies are negotiating the drug prices for themselves."

MK: "Right. What the Medicare system will not negotiate the price, it will set the price, the way it sets the price for all regular Medicare procedures, doctor procedures, and what you have then is government control of the pharmaceutical industry. Which is going to be a disaster. The reason that VA prices are lower is it's basically a socialized medical system. You go to a VA doctor, you go to a VA hospital, you go to a VA pharmacy, and the VA pharmacies only have 25% of the drugs that seniors actually use all the time. So it doesn't work. The private market does work, but the Democrats don't believe in it."

FB: "Of course not, this is theology for Democrats. I mean, the empirical evidence as Mort expressed is very strong that the… I can't think of anything where the market has worked so well to drive down prices with this competition. But they don't care about that."

BH: "What about the politics of it?"

FB: "The politics of it.. Look, if they can make the case effectively, which I don't think Democrats have so far, but potentially they could, we will get you lower prices still, and yet provide you all the variety of drugs you're using now, that could be a strong argument."


This entire segment sounded like an infomerical for Medicare Part D, as none of the panelists mentioned one single problem seniors are having with the plan.

What none of the panelists mentioned is what is referred to as the "donut hole." According to Wikipedia:

"The MMA establishes a standard drug benefit that Part D plans may offer.[11] The standard benefit is defined in terms of the benefit structure and not in terms of the drugs that must be covered. In 2006, this standard benefit requires payment of a $250 deductible. The beneficiary then pays 25% of the cost of a covered Part D prescription drug up to an initial coverage limit of $2250.

Once the initial coverage limit is reached, the beneficiary is subject to another deductible, known officially as the Coverage Gap but referred to more commonly as the "donut hole," in which they must pay the full cost of medicine."

The Medicare Rights Center issued this statement on the plan:

"By now most people have heard that the Part D benefit has a large gap in coverage that often hits people by surprise when they go to the pharmacy and discover they have to pay 100 percent of the cost of their drugs. During this gap, the insurance companies providing Part D still receive monthly checks from plan members and taxpayers, but those companies pay nothing toward covering the prescription drugs of people with Medicare.

Less well known is that the coverage gap is even wider next year. The Bush administration has bragged to the press that the average Part D premium is going down, but it failed to mention that all other out-of-pocket spending is going up. The amount people will have to spend out of pocket before their Part D coverage starts picking up the tab again will rise from $3,600 in 2006 to $3,850 in 2007 (see chart below to learn how the standard Part D benefit changes in 2007).

Worse, that money will buy fewer medicines in 2007 because Part D fails to rein in drug prices. An AARP study found that prices for the prescription drugs most commonly taken by older Americans rose over 6 percent, more than double the cost of living adjustment in Social Security benefits that kick in on January 1. Earlier research found that Part D plans pass on price hikes by pharmaceutical manufacturers nearly dollar for dollar to plan members."

These are issues that are involved with the plan, but the viewers didn't hear any of this from the "All Star Panel" last night. They specifically ignored any problem with the plan while attacking Democrats for wanting to negotiate with the drug companies on behalf of seniors.