By Robert Blancato
A new government report found that the President’s healthcare law has saved seniors $38 million in drug costs this year. Those are welcome savings to elderly patients across the country still struggling with the recession. These drug savings come from the health law’s provision phasing out the “donut hole” in Medicare’s Part D prescription drug benefit. The donut hole is a chasm in coverage between the program’s upper spending limits on a patient, and the total at which emergency medical insurance kicks in. Previously, while in the donut hole, Medicare beneficiaries had to bare 100 percent of the costs of their drugs.
This year, the health law drops donut hole drug costs by 50 percent. That $38 million in savings averages out to $800 per Medicare enrollee.
The law also helps seniors by providing a one-time $250 rebate to all Medicare patients that fell in the donut hole last year. To date, nearly 4 million people have received a check. And the law gradually expands generic drug coverage in Medicare over the next decade.
This reform makes a very successful public healthcare program even stronger. Part D has cost the government dramatically less than initially anticipated. Last year the Centers for Medicare and Medicaid Services dropped its 10-year cost estimate for the program by an astonishing 43 percent, from $643 billion to $373 billion.
While health insurance premiums overall have been skyrocketing, Part D premiums have remained affordable. The average monthly premium for the program is just around $30. By bolstering Part D by closing the donut hole, the President have given seniors even more savings on the medicines crucial to maintaining their health.
As much as seniors have benefited from the healthcare reform law thanks to the changes to Medicare Part D, many are concerned about another change to Medicare — the establishment of a new agency called the Independent Payment Advisory Board (IPAB). Consisting of 15 presidential appointees, IPAB is empowered to make cost-cutting recommendations for Medicare every year the program exceeds preset spending targets, starting in 2014. Without congressional action, IPAB’s recommendations automatically become law. And they’re exempt from administrative review.
While the Board’s powers are limited, it can still make some major policy changes, including slashing physician reimbursement rates and constricting coverage schemes for drugs and other treatments.
Instituting real cost-cuts in Medicare is a must; the program is expected to go bankrupt by 2017 without reform. But, despite the good intentions, IPAB isn’t the solution. The Board is effectively unaccountable to the American public. Seniors hurt by its policy decisions have no legal recourse.
The responsibility for reforming Medicare must remain with Congress. Giving distant, unelected bureaucrats huge powers over the program is too dangerous. And, for the first time in long time, members of both parties appear to fully appreciate the program’s problems and have indicated they’re willing to work together to keep it solvent without compromising senior care.
Fortunately, there’s bipartisan legislation moving forward to repeal IPAB. Members of both parties — and a host of hospital, physician, patient groups, and aging groups — have expressed concern about IPAB.
The administration should shift course and support these efforts. Otherwise, IPAB could undermine the great benefits seniors will enjoy thanks to the Medicare Part D reforms.
Robert B. Blancato is the executive director of the National Association of Nutrition and Aging Services Programs. He is also the National Coordinator of the Elder Justice Coalition.
