Tuesday, December 6, 2011

Administration (Still) Peddling a Raw Deal for Seniors

USA Today reports this morning that the Administration will attempt to trot out more data today regarding the Part D discount program as a way to show seniors are benefiting from Obamacare.  But, as the Associated Press has previously noted, this story comes with a major catch:  Only a fraction – about 1 in 20 – of the 47 million Medicare beneficiaries have benefited from the new discount program.  That means a very small percentage of program participants actually are receiving benefits from Obamacare.

Remember:  All seniors will be pay higher Part D premiums so that only some beneficiaries can receive richer coverage.  The Congressional Budget Office estimated that “the law would lead to an average increase in premiums for Part D beneficiaries of about 4 percent in 2011, rising to about 9 percent in 2019.”  That means that 17 million seniors will higher premiums, but only about 400,000 beneficiaries passing through the doughnut hole will actually receive the full benefit of the discount regime established in the law. (Many of the beneficiaries in the “doughnut hole” are low-income seniors, and the Medicare program already covered their additional costs in the coverage gap prior to Obamacare.)  Some would categorize this redistributive scenario as “spreading the wealth around.”

This drug discount program is clearly a big benefit to special interests, as Big Pharma is virtually guaranteed to increase sales thanks to its “rock-solid deal” struck behind closed doors.  But in reality, Obamacare will provide only modest benefits to a select few seniors, while raising costs for everyone else – and that’s not “reform.”