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Lawmakers: Government should issue Medicare drug plan itself

Patient Financial Services Weekly Advisor, October 19, 2007

Democratic lawmakers to Congress: Get rid of the insurer and administer the Medicare drug program yourself.

A report found the drug program's high administrative costs and low discounts are hurting consumers, according to a story by the Associated Press.

Congress should make the discounts on drugs more like Medicaid's and slash administrative costs, moves that would save taxpayers about $14 billion per year, the Democrats say. They also feel the government should administer the drug program itself. The Medicare drug program covers more than 18 million elderly and disabled participants.

Private insurers, on average, offer discounts of about 8.1 percent to consumers under the Medicare drug program compared to what they would pay out of pocket.

But with Medicaid, the discount is 26 percent.

Of the $47 billion the federal government and beneficiaries pay through monthly premiums, 10 percent of that pays for administrative costs, according to the Democrats' report.

But the Bush administration says most consumers are happy with the Medicare drug program as it is now - 90% in public opinion surveys say they are satisfied.

"On every level, the Medicare prescription drug program has exceeded expectations," Kimberly Kleine, spokeswoman for the Centers for Medicare and Medicaid Services, tells the Associated Press. "It has high satisfaction rates and is saving seniors and taxpayers significantly more than was ever expected."

To read the full story in the Associated Press, click here.

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