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Medicare's premium prices

Thanks to Congress' prohibiting the government from negotiating lower prices, Medicare Part D drugs will cost far more than under VA insurance plans.

The marketplace Congress created for Medicare prescriptions is looking more like Neiman Marcus than Wal-Mart. Though the government has flooded the market with 43-million seniors, the group discount is, at best, pennies on the dollar.

New price comparisons compiled by Families USA, in fact, reveal a Medicare drug plan that is gouging seniors and taxpayers alike. Here's one jarring example:

The U.S. Department of Veterans Affairs pays $253 for a year's supply of Protonix, a common prescription for acid reflux. The lowest-priced Medicare Part D insurance company in two regions offers the drug for $1,080.

Medicare spokesman Peter Ashkenaz calls the study "a tired old ideological argument" over "government price controls." But there is nothing tired or ideological about comparing how the same federal government could offer prescription drugs at starkly different prices to two different types of consumers. These are real numbers with real consequences, and a fiscally prudent Congress would demand answers.

Oddly enough, price never has seemed to matter to the self-described conservatives in Congress who approved the Medicare Modernization Act. They were so eager for pharmaceutical and insurance industry campaign donations and so enamored by privatization that they refused to accept the lessons of their own VA. Through its group purchasing power, the VA has been able to get deep discounts on generic and brand-name prescriptions and even for drugs that are not on its formulary.

Congress, though, chose a different route for seniors. It lauded the "power of competition" and actually wrote a provision in the new law prohibiting the federal government from negotiating directly with manufacturers for lower prices, prohibiting the government from saving money.

Now that the Medicare prescription companies have released their prices, the differences are impossible to ignore. And these are not matters of degree. Of the 20 most common drugs for seniors, the median price differential between VA and Medicare Part D is 48 percent. The VA pays $497 for a year's supply of Lipitor, used to lower cholesterol levels, and the lowest price for Medicare plans is $718.

Taxpayers subsidize this plan annually to the tune of $700 per recipient, and the projected cost over the first decade already has jumped from $400-billion to $1.2-trillion. Unfortunately, as the new report suggests, taxpayers won't be the only ones paying top dollar. Seniors who take five leading prescriptions could pay as much as $2,561 more each year than they would under the VA prices.

President Bush has called Part D "a good deal for seniors" and lauded the array of "choices." What he doesn't say is that the choices are not, comparatively speaking, cheap ones.

The Medicare prescription plan, thanks to the conservatives who created it, amounts to a government-created and government-subsidized economy with virtually no buying power. So Medicare ends up buying wholesale at retail prices.

[Last modified December 26, 2005, 00:43:13]