Jan. 15. Beware every single Democratic presidential candidate when it comes to the Medicare prescription drug benefit. All of them would implement a change that would ruin one of the most successful elements of the program.
Again and again on Tuesday night, as was the case in all discussions on the issue in prior debates, all the candidates agreed that “the government” should “negotiate” the prices for Medicare Part D drugs. Democrats have been pushing this idea for two decades, even before the Part D program was created in 2003 legislation. The statistics show the idea was bad then, and that the system has worked immensely better without government negotiation ever since.
Democrats originally would have “pegged” the average monthly premium cost at $35 for 2005, with government negotiation designed to keep annual cost increases no higher than the cost of medical inflation afterward. The idea was that the “purchasing power” of the federal government would keep drug companies and insurance companies from profiteering, thus keeping the prices down.
Republicans insisted instead that the free market would keep costs down better, and that artificial government interference would instead drive private insurers out of the market, such that less competition would result in higher, not lower, prices in the long run.
The numbers show Republicans were right. When fully implemented in 2006, the actual average premium was not the $35 peg-plus-one-year-of-inflation the Democrats projected, but $32 — a 14% savings from the original projection. Since then, the market has kept the average premium exactly in line with overall, ordinary inflation in the economy, rather than with the much higher rate of healthcare inflation in the intervening years. The $32 monthly in 2006, adjusted for overall inflation, is the almost-exact equivalent of the $42 monthly premium in force for 2020….
[For the rest of the statistics, and the obvious conclusions that should be drawn, read the rest of the column here.]
