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posted: 4/8/2013 5:00 AM

Competition helps keep Medicare working

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Medicare has plenty of issues that need to be fixed. The Part D program isn't one of them and our seniors know it -- but President Obama doesn't. If the president has his way, seniors may lose a great benefit.

The Congressional Budget Office keeps finding cost savings in Medicare Part D, Medicare's Prescription Drug Benefit Plan. That's good news for the about 900,000 Illinois seniors who have Part D plans. Unlike other parts of Medicare, Part D is run entirely by private insurance companies who compete to sign up seniors and then bargain hard with drug companies for the best price on lifesaving drugs.

Seniors get to choose what works best for them, and the competition keeps costs in check. Perhaps that's why 90 percent of enrollees say they are satisfied with their Part D plans. Premiums in 2012 averaged well below the initial $56 forecast and costs to Medicare are 43 percent below initial projections. And because seniors can afford prescriptions, they remain healthier, saving Medicare $12 billion on hospital and skilled nursing facilities.

Unfortunately, President Obama is on a misguided crusade to gut the program. In a desperate search for government revenues to service other, less well-functioning programs, the president is urging Congress to coerce drug manufacturers to kick back to the federal government 15-23 percent of the cost of drugs provided to low-income seniors, regardless of the competitive price negotiated by the insurer and manufacturer. Former Congressional Budget Office Director Douglas Holtz-Eakin estimates that this could result in seniors' Part D premiums increasing by 20-40 percent.

Medicare Part D proves free market principles can improve health care outcomes. We should apply these reforms to other parts of Medicare, not erode Part D.

David W. From


Illinois state director

Americans for Prosperity

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