Keeping the government out of Medicare Part D

Keeping the government out of Medicare Part D
Is the direct federal negotiation of drug prices a good idea? Consider the “non-interference clause” that currently prohibits such actions in Medicare Part D — the federal program that subsidizes prescription drugs for seniors. Surprise. The non-interference clause was written by Sens. Ted Kennedy and Tom Daschle — and it’s a good idea.
 
Nobody doubts that President Trump and his team are shrewd negotiators. But the sorts of “negotiations” that the president refers to in Medicare have nothing in common with haggling over a real estate deal. Specifically, his desire to repeal the non-interference clause would result in a sharp increase in Medicare drug prices and a substantial decline in patient choice.
 
The non-interference clause empowers private insurers to negotiate drug prices with manufacturers and prohibits government officials from getting involved. So far, private insurers that offer Part D plans have had great success in keeping pharmaceutical prices down. In fact, the Congressional Budget Office observed that Part D plans have “secured rebates somewhat larger than the average rebates observed in commercial health plans.”
Just look to the program’s success.
 
Medicare Part D’s cost reductions over the past decade and a half are impressive. Between 2004 and 2013, Part D cost an extraordinary $349 billion less than initial estimates. And premiums for the program are roughly half of the government’s original projections.
 
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