Harold Ford Jr's Fuzzy Medicare Math

  • by: |
  • 10/11/2006
Now that the Yankees were eliminated from the ALCS in humiliating fashion I have found myself channel surfing to fill the time....I stumbled upon a C-SPAN broadcast of the debate between Congressman Harold Ford, Jr. and Bob Corker, the Dem and GOP candidates for Bill Frist's Tennessee Senate seat. I might have been hallucinating but I think I heard Ford say 2-3 times that if the government negotiated with drug companies (price controls) it could save Medicare $1 trillion. Since the Part D program will spend about $500 billion over ten years, I am waiting for Ford to explain his math. Or does he have a plan to force drug companies to kick in twice what the government spends on medicines? Or maybe this is over 100 years...

In any event, Ford's koolaid drinking on price controls contrasts with the bill he co-sponsored with Cal Dooley in 2003 which itself sounds and adds up remarkably like the Part D program now in operation. In case Ford forgot or you didn't know about it, here it is:

Zero-Premium, High-Cost Protection, Part B Drug Benefit

Universal ... Progressive ... Affordable

• Zero Premium: This benefit would be incorporated into the existing Medicare Part B
program. No separate premium and no increase in Part B premium.

• Universal Eligibility: All Part B enrollees.

• Universal Protection Against High Drug Costs: Medicare will pay 80 percent of the
cost of drugs after beneficiary has total drug costs of $4,000. The individual will pay
based on a flat three-tiered co-payment: $4/$16/$24*

• Benefit Counts All Drug Spending: Negotiated drug costs Β not just the
beneficiaries= out-of-pocket spending Î’ counts toward the $4,000 deductible.

• Low-Income Benefits: Beneficiaries up to 200 percent of poverty will be eligible to
receive enhanced benefits via Medicare drug discount cards, Medicare+Choice,
Medicaid, Medigap, and other new coverage options.

Medicaid – 135% of fpl tiered co-payment: $4/$16/$24*
135% - 150% of fpl tiered co-payment: $6/$24/$36**
150% - 200% of fpl tiered co-payment: $10/$40/$60***
(State option with a federal/state match at the SCHIP rate)

• Universal Benefit Via Medicare Approved Drug Card Plans: A wide variety of
Medicare approved drug card plans including PBMs, State Assistance Plans, retiree
coverage, Medigap, Medicare + Choice, Medicaid and others that offer all seniors access
to the market-based discounts widely available to people with private insurance. These
discounts would apply to all drug purchases.

• Universal Benefit Via Current Coverage: Encourage the continuation of current
drug coverage through Employer/Retiree plans, Medigap plans, Medicaid, State
pharmaceutical assistance plans, or Medicare+Choice plans; all based on
reimbursement agreements with Medicare.

• CBO Cost Estimate: Under $400 billion

"Market-based discounts" "PBMs" "Under 400 billion" Sounds like a program we already know.

I am still waiting to see how the D's will 'negotiate' down drug prices without closing down formularies and restricting choices like the VA does. Can anyone say Third Rail?

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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