Posted by D. Cupples
| If nothing else, that the 2003 so-called "Medicare Modernization" Act barred Medicare from negotiating discounts from
drug makers was a sign that private companies would end up slurping
down tax dollars like a kid with an Oreo milkshake.
Yesterday, the House Oversight Committee released a report about the costs of allowing private insurance companies to handle Medicare Part D (prescription drugs for seniors). In part, the report said:
"Taking into account the costs to the government of monitoring the private insurers, total administrative expenses, sales costs, and profits will reach $4.6 billion in 2007, with the profits of the Part D insurers alone accounting for $1 billion." (Report overview and full report.)
Private insurers' expenses are six times higher than those of traditional Medicare, according to the report. Consider just the $1 billion in company profits: how many prescriptions could that money buy for seniors if it weren't funneled to insurance companies?...
One answer: a million prescriptions -- if each one cost a whopping $1,000.
The Oversight Committee's report says that in 2007, alone, Part D insurers' expenses will end up costing taxpayers and seniors $180 per beneficiary.
The report also indicates that Part D insurers have been getting rebates from drug makers but haven't been passing them along to seniors who are in the Part-D "gap" (i.e., seniors paying 100% out of pocket for drugs). Apparently, federal law requires insurers to pass along discounts and rebates to seniors.
Yet another issue: somehow, Part D insurers negotiated only 8.1% in drug-maker rebates for Medicare in 2007. Under Medicaid, the federal government managed to negotiate drug rebates of 26% from those same drug companies.
Healthcare profiteering is not a new issue, as indicated by the posts linked below:
* Drug Companies Scammed Taxpayers, Cancer Patients
* Contractor Fraud: Driving up Healthcare Costs?
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