Elizabeth Wright

Medicare Part D is one of the few government-created programs that has consistently cost less than the Congressional Budget Office’s (CBO) original estimates.  Every fall, seniors get to choose from a variety of plans for their drug coverage.  Pharmaceutical companies, pharmaceutical benefit managers (PBM), and pharmacies know this and they compete vigorously for seniors’ business.  A PBM is a third party administrator of prescription drug plans (Well-known PBMs are Catamaran, CVSCaremark, Express Scripts, Humana Pharmacy Solutions and USScript).  PBMs negotiate drug prices, establish formularies, process, and pay prescription drug claims in private insurance, as well as Medicare.  This robust competition among private sector entities is the major reason that Medicare Part D costs less than originally anticipated; rather than employing heavy-handed government edicts or price controls, market forces keep prices low and satisfaction high.  So, why would the Centers for Medicare and Medicaid Services (CMS) suddenly move to “fix something that ain’t broke”?    

Under the Affordable Care Act (ACA), better known as Obamacare, the eligibility for Medicaid program was expanded to nearly all Americans under the age of 65 that are effectively at or below 138 percent of the federal poverty level (approximately $32,913 for a family of four.)  Prior to Obamacare, Medicaid eligibility was for these mandatory classes: children, pregnant women, very-low income parents, seniors, the blind, and the disabled.  Eligibility for these six classes varies by income.  (States do have some flexibility in designing and expanding the program.)