Life expectancy for Indiana men is up to 75 years. Women in the state are living to age 80. Today’s senior citizens are also spending vastly less time and money on hospital stays.
That’s partly thanks to Medicare Part D, the federal program that provides senior citizens and individuals with disabilities with prescription drug coverage.
Some in Congress think they can do better. They are proposing that the government interfere in Part D to – in effect – set prices. Such a change would devastate seniors’ health and, in the long run, jeopardize the kind of advances that have been saving and extending lives.
Medicare Part D has succeeded because it encourages competition. Indiana’s 1 million Medicare beneficiaries get to choose among 28 plans, starting at just $18.40 a month. Many plans have monthly premiums of far less than $30.
These choices enable seniors to pick the plan that best meets their needs. And premium prices are expected to remain low. Indeed, estimates are that premiums will remain stable in 2016 at a national average of $32.50 a month.
Overall U.S. health spending decreases when seniors have access to prescription drugs. Patients who adhere to the medication regimes prescribed by their doctors see fewer complications, hospitalizations and fatalities.
In fact, Part D is credited with saving Medicare enrollees $1,200 a year.
Medicare’s drug benefit is also saving money for taxpayers. In its first decade, the program cost $349 billion less than the Congressional Budget Office’s initial estimate.
Those looking to modify Part D so that the government sets prices have learned little from the history of such schemes. Consider the Department of Veterans Affairs. On average, Part D plans cover all but nine of the 200 most popular drugs among seniors. At the VA, where price controls are in place, nearly 40 drugs are left off the formulary.
On average, it takes $2.6 billion and more than a decade of research for a new drug to win approval. Just 12 percent of potential drugs pass the expensive clinical trial testing process.
And of drugs that do win FDA approval, only about two out of 10 return revenue that matches or exceeds research and development costs.
Medicare Part D has greatly expanded access to prescription drugs, including mental health medications, improving the health and well-being of millions, and costs seniors and taxpayers far less than expected.
Let’s make sure the nation continues to see these benefits.