If you listened to the the Dems and the liberal media, you would think the Medicare Drug Plan is a total disaster. Seniors could not figure out how to enroll, the plans were to hard to understand, and not all seniors had enough time to enroll. However, facts have a nasty habit of debunking DNC talking points Success of drug plan poses challenge for Democrats By Lori Montgomery, Washington Post | November 27, 2006 WASHINGTON -- It sounded simple enough on the campaign trail: Free the government to negotiate lower drug prices and use the savings to plug a big gap in Medicare's new prescription-drug benefit. But as Democrats prepare to take control of Congress, they are struggling to keep that promise without wrecking a program that has proven cheaper and more popular than anyone imagined. House Democrats have vowed to act quickly after taking power in January to lift a ban on Medicare negotiations with drugmakers, which they hope will save as much as $190 billion over a decade. However, House leaders have yet to settle on a strategy. Leaders also acknowledge that negotiation is unlikely to generate sufficient savings to fill the "doughnut hole," the much-criticized gap in coverage that forces millions of seniors to pay 100 percent of drug costs for a few weeks or months each year. Drug-company lobbyists, Bush administration officials, and many congressional Republicans are preparing to block any effort to increase federal control over drug prices, saying the Medicare benefit is working well. They contend that instead of saving money, government negotiations could raise drug prices for all consumers while limiting choices for people on Medicare. "This is going to be much more of a morass than people think," said Marilyn Moon, director of the health program at the American Institutes for Research and a former trustee of the Social Security and Medicare trust funds. Negotiating drug prices is "a feel-good kind of answer, but it's not one that is easy to imagine how you put into practice." The Medicare drug benefit, one of the Bush administration's signature domestic programs, was created in 2003 and took effect in January. It has enrolled 22.5 million seniors, some of whom had no previous drug coverage. Polls indicate that more than 80 percent of enrollees are satisfied, even though nearly half chose plans with no coverage in the doughnut hole, a gap that opens when a senior's drug costs reach $2,250 and closes when out-of-pocket expenses reach $3,600. By the latest estimates, 3 million to 4 million seniors will hit the doughnut hole this year and pay full price for drugs while also paying drug-plan premiums. The cost of the program has been lower than expected, about $26 billion in 2006, according to the nonpartisan Congressional Budget Office. The cost was projected to rise to $45 billion next year, but Medicare has received new bids indicating that its average per-person subsidy could drop by 15 percent , to $79.90 a month. According to those involved in the 2003 negotiations, even some Democratic bills to create a Medicare drug benefit included a ban on direct government negotiations. The reason: Seniors purchase half of all prescription drugs. The drug industry argued that a government program representing seniors would not negotiate prices, it would set them. If government price controls were effective, the theory goes, they could significantly lower drug-company profits and discourage medical innovation. If price controls were not effective, they could drive prices higher. If companies were required to sell to Medicare at 15 percent off the average wholesale price, for example, they might just raise the wholesale price. Proponents say the program avoids that problem by relying on dozens of private insurers, which bid to offer coverage to Medicare recipients. Some offer low premiums and lots of generic drugs, while others have high premiums but offer brand-name drugs and full doughnut-hole coverage. Medicare averages the bids and sets a per-person subsidy. Pressure falls on the insurers to negotiate the best drug prices. Consumer advocates contend that if Medicare were permitted to negotiate prices, its purchasing power would produce drug discounts similar to those obtained by the Veterans Affairs Department, which covers 4.4 million people. Limiting choice would be unacceptable to many Medicare beneficiaries, said Senator Charles E. Grassley, Republican of Iowa, outgoing chairman of the Senate Finance Committee. "I don't think seniors want the government in their medicine cabinets," he said. For now, it is not clear how aggressively Democrats are willing to push price negotiation. Ideas range from repealing the ban on negotiations to creating a separate, government-run Medicare drug program with strong negotiating power. © Copyright 2006 Globe Newspaper Company.