Saturday, September 21, 2013

Medicare Part D: Another year, another huge price increase

I signed up for Medicare last month. In addition to standard Medicare, I added Part D, the prescription drug benefit. My 2013  costs, if they had covered the entire year, would have come to $529 for insurance and $330 for prescription copays.

Today's mail brought the rates for 2014. The insurance premium has increased to $650, or by about 23%. Copays have also increased, to $616, or by nearly 87%. The total increase - assuming I won't need any additional medications - comes to 47%.

I was not happy when President Bush proposed and AARP supported Medicare Part D, the prescription drug benefit. The idea of insuring seniors' drugs was good. The resulting law, which specifically forbids the federal government from negotiating prices with pharmaceutical companies, was insane.

Well, "insane" is putting a good face on it. The financiers who supported the companies who bought the politicians who voted for the law were by no means insane. They were lining their own pockets, never mind the rest of us.

It's obvious, isn't it? If the government gives away money without limits and accountability, retail prices rise, insurance premiums rise, and consumers end up paying as much (or more) out-of-pocket than before the government stepped in.

Want proof? Take a look at this chart from the Kaiser Family Foundation. Notice that the U.S. government spends about as much of its GDP on healthcare as other developed countries (without, however, insuring everybody, as the other countries do). Notice that, unlike citizens of other countries, U.S. citizens spend a whopping amount in addition to what the government spends. The difference? Those other countries put strict limits on what pharmaceutical companies and other medical suppliers can charge.

Some Americans suggest that the government should just stop subsidizing things like health care and education. That doesn't make sense unless you think that only rich people should have access to schools and hospitals. But it makes more sense than subsidizing something without putting a ceiling on what the lucky recipients can charge for their goods and services.

I am going to look for a different Medicare Part D insurance company. I don't expect to find one that's much better, however, until our lawmakers learn to say Yes to middle-class and disadvantaged people and a loud, resounding No! to rich institutions and individuals who want to get even richer at our expense.

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