As ObamaCare Continues To Struggle, Medicare Part D Keeps Shining

Yesterday, President Obama’s pick to be the next health secretary, Sylvia Mathews Burwell, faced questions over the troubled healthcare law. Burwell pledged to recoup any federal taxpayer dollars that were misused on failed health sign-up websites in states including Maryland and Oregon.

And while she got largely cordial treatment – even from Republicans – during her appearance before the Senate finance committee, and it seems that her confirmation will be smooth sailing, there remains serious dissatisfaction with ObamaCare.

Indeed, on the same day as Burwell answered questions, two Republican senators, Orrin Hatch of Utah and John Barrasso of Wyoming, introduced a new bill that would punish states that scrap their state-run ObamaCare exchanges in favor of a federal marketplace. The idea is to make these states pay back the federal government the money that was wasted. The bill dictates that any state that forgoes its exchange would pay back 10% of taxpayer funds every year for 10 years.

“The American people are sick and tired of writing a blank check for the health care law’s complete failures,” Barrasso said in a statement. “Taxpayers shouldn’t have to pay twice for the mistakes of incompetent state bureaucrats who couldn’t set up a working health care exchange.”

Save Medicare.... Save Medicare…. (Photo credit: Glyn Lowe Photoworks.)

It follows that there can be no doubt that Burwell has a long road ahead of her. And the healthcare law itself has a long road ahead, too.

But in all the negativity – much of it justified – surrounding ObamaCare, the Medicare Part D program continues to succeed beyond all expectations.

Just last month, the CBO released a spending analysis that speaks to the great success of Medicare Part D. Part D costs 45%, or $349 billion, less than initial projections.

What’s more, drug costs only increased by 1.8% per year, growing much more slowly than total per capita drug costs. And the CBO has reduced its 10-year baseline forecast for Part D spending by $56 billion this year, following three consecutive years in which CBO annually lowered its 10-year Part D forecast by more than $100 billion.

So while healthcare costs are soaring for many Americans, projected estimates for Part D spending having fallen 23% – a figure well worth praising and trying to emulate in other areas of healthcare.

The soaring costs of deductibles are a problem for all Americans. But the Medicare Part D deductible is set to decrease this year. And Part D is helping to lower beneficiaries’ overall healthcare costs as well as reduce the probability of hospitalization.

A recent study in JAMA found that implementation of the Medicare prescription drug program was followed by a $1200 decrease in nondrug medical spending among those who previously had limited drug coverage. This equates to $13.4 billion in overall savings during the first full year of Part D.

To be sure, there is much more to praise about Medicare Part D. It’s improving beneficiaries’ economic situation. And satisfaction with the program is consistently high.

Medicare Part D delivers for beneficiaries and keeps costs low due to strong competition among health plans and negotiate with pharmaceutical companies for savings.

As I have argued before, ObamaCare needs to be reformed to allow purchasing insurance across state lines, which will help to lower costs. And we should also expand the use of health savings accounts for those with high-deductible plans to help temper the growth of costs and increase efficiency overall.

There’s a lot we can learn from Medicare Part D. And we certainly shouldn’t be talking about making any cuts to the program. It’s delivering for its beneficiaries far better than anyone – including the CBO – could’ve expected.