Ezra Klein’s F on Medicare Part D

James Capretta / June 16, 2011

At the time of its enactment in 2003, the Medicare drug benefit—known as Medicare Part D—had many critics. Some said the program, which is built on consumer choice and vigorous competition among private plan options, wouldn’t work because private plans would decline to participate. Others said seniors wouldn’t sign up for the voluntary benefit because the competitive structure would be too complex. Still others said the program would explode in costs without government-regulated price controls.

All of these predictions were dead wrong. The program is now in its sixth year of operation and has exceeded all expectations. Some 90 percent of Medicare participants are now in secure drug coverage of some sort, and public opinion surveys show that seniors are very satisfied with the new program. Most importantly, the drug benefit’s costs for the first decade are coming in 42 percent below what was predicted at the time of enactment. (more…)