The Medicare Drug Benefit One Year Later The controversial Medicare prescription-drug benefit is a year old and seems to be a success.
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The Medicare Drug Benefit One Year Later

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The Medicare Drug Benefit One Year Later

The Medicare Drug Benefit One Year Later

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This is MORNING EDITION from NPR News. I'm Renee Montagne.

The Medicare prescription drug benefit is nearly a year old now. It remains controversial, but it's turning out better than some of its toughest critics warned. To look back on the program's first year, we turn to David Wessel; he's deputy Washington bureau chief of The Wall Street Journal. Good morning.

Mr. DAVID WESSEL (Deputy Washington Bureau Chief, The Wall Street Journal): Good morning, Renee.

MONTAGNE: The prescription drug benefit relies much more than regular Medicare on private companies coming forth to offer policies to the elderly. There was a lot of question about that. How has it turned out?

Mr. WESSEL: Well, the initial fear was that private companies, private insurance plans, wouldn't come to the party. In fact, so many came that now the complaint is that the elderly have too many choices. Most people ended up with more than 40 plans to choose from this year. And for next year, most people will have 50 choices.

MONTAGNE: Well, of course one of the early problems, though, was that it was terribly confusing. Does this make it even more confusing?

Mr. WESSEL: Yes. That was the refrain last year, and each of these plans is a little bit different and it's very difficult to pick them. There's no doubt about that. But I think that what happened was, a year ago, people weren't getting any benefit from this taxpayer subsidized insurance. And today, some people, not all of them, but some people are actually getting a better deal on drugs than they were getting before.

And you can see that in the polls. J.D. Power, which is a company that takes consumer temperatures on all sorts of product, did one, and they found that 45 percent of the people who they surveyed were delighted, that is gave 10 on a 10-point-scale the Medicare prescription drug benefit. And another 35 percent gave it an eight or nine. And other polls are consistent. So it had nowhere to go but up, and it went up.

MONTAGNE: Although I'm doing the math, and that seems to leave the largest group of people who are, what, unhappy?

Mr. WESSEL: A number of people have problems with the prescription drug benefit. Either they had problems getting their paperwork done, or they were disappointed when they discovered that, for some people, the benefit is pretty stingy. There are a lot of people who have this insurance and have to spend a lot of their own money, in some cases $2,000 or more on drugs. And so they are disappointed because they didn't understand that the benefit had so many holes in it.

MONTAGNE: Talking about how much money had to be spent, there was a lot of criticism over the billions that would be spent by the government on this benefit.

Mr. WESSEL: In the end, the prescription drug benefit cost less than the actuary's initial estimate, but it's still very expensive - $30 billion this year, over $40 billion next year. So the question's been raised, is there a different way to structure this benefit so that it could provide more benefits to the elderly but cost the government less. And of course that's the thing that the Democrats are harping on.

They say that if only the government would use its muscle to negotiate lower drug prices from drug manufacturers, we could have a better benefit for less taxpayer money.

MONTAGNE: And what are they talking about doing now that the Democrats are in control of Congress?

Mr. WESSEL: Well one of the top priorities of the Democrats when they put out their agenda during the election was to make the benefit better; to close what's called the donut hole, the part of the plan where people have to pay a lot of money out of pocket. And the way they said they would do that was by changing the law so that the government has the power to negotiate prices with the drug companies.

But whether they can actually pull that off, particularly whether they can find a way to give the government that power and get the Congressional scorekeepers to say that saves enough money so you can sweeten the benefit, remains to be seen. It's a big issue for the Democrats now as they get ready to take over Congress.

MONTAGNE: So looking back in balance, who wins on this one?

Mr. WESSEL: I think it's a good question, Renee. In a way, the Republicans did something very unusual for them; they expanded a government benefit. And they didn't get very much credit for it in the election. The Democrats made a lot of mileage by pointing out the flaws on the prescription drug benefit, but now that they've taken over Congress they have to show that they can really do something about it, and that may be much more difficult as legislators than it was as candidates.

MONTAGNE: David, thanks very much.

Mr. WESSEL: You're welcome.

MONTAGNE: David Wessel is Deputy Washington bureau chief for The Wall Street Journal.

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