David Bynon

According to the provision of the Affordable Care Act, the government can set the prices for the drugs and the pharmaceutical companies who are the top money making industries will just have to decide whether they can take it or leave it. Before the emergence of the Part D, there was no prescription drug insurance for the seniors since it was really economically viable for the private insurance companies. With Obamacare, an estimate of 17.7 million seniors who are enrolled in the Original Medicare will enjoy the prescription drug plan and another 9.9 million will benefit from the Part D.

One would think that insurers offering MA plans would have an incentive to provide high-quality service, in an effort to attract more enrollees and thus increase their revenue. And that has been true until now when the Affordable Care Act (ACA) changes the way plans are paid, in ways that are ineffective at best, and counterproductive at worst, as we show in a report released this week by the American Action Forum. Since 2008, MA plans have been rated on a 1-star to 5-star scale to assist beneficiaries in the selection of an MA plan. Beneficiaries may, if they wish, use these ratings in conjunction with information about benefits, copays, and available providers, to select the MA plan that best meets their needs. Until now, these ratings have been for informational purposes only; they have not affected the benefits available in MA plans, or the payment the MA plans receive.

From its outset, Medicare only covered essential inpatient (Part A) and outpatient (Part B) services, which has long meant that seniors had to purchase supplemental private insurance to cover what Medicare does not. One of the reasons I ran for Congress in the early 1980s was to help regulate the market for supplemental Medicare insurance plans, because unscrupulous agents were exploiting holes in the Medicare law to sell seniors worthless policies. (In 1990, former Senator Tom Daschle and I passed the "Medigap" law to regulate the market for supplemental Medicare insurance.) In 1997, Congress passed Medicare Part C to give Medicare beneficiaries the choice to receive their Medicare benefits through a private health insurance plan. This reform has become a lifeline for seniors in states like Oregon, where Medicare's low reimbursement rates have made it increasingly hard for seniors to find a doctor.

Given the emphasis both parties are placing on health care as a defining political issue, their contrasting approaches to the government-run health insurance program serving 49 million people are certain to command considerable attention in both the presidential and Congressional campaigns. President Obama illustrated the importance he is placing on Medicare when he vowed this month: “I will never allow Medicare to be turned into a voucher that would end the program as we know it. We’re not going to go back to the days when our citizens spent their golden years at the mercy of private insurance companies.” Mr. Romney, who would limit the government’s current open-ended financial commitment to Medicare, contends that Mr. Obama has no workable plan. Under the Romney proposal, the government would contribute a fixed amount of money on behalf of each beneficiary, and future beneficiaries could use the money to buy private insurance or to help pay for traditional Medicare.

Democrats failed to inform seniors nearly half of Obamacare’s cost would be funded initially by taking more than $500 billion from Medicare. When this information was made public, Democrats promised the cost-shifting would not in any way lead to benefit cuts. In addition, they were told Obamacare would reduce the deficit and were told everyone could keep their doctors. If Democrats genuinely believed what they were saying, they obviously failed to factor into their quirky calculations that pesky little fact that Medicare reimbursement cuts to doctors would send them packing in droves, making it a bit tricky to use the same doctor if he or she no longer treats Medicare patients.

Making wealthier seniors pay more for their Medicare is quietly becoming the most likely compromise between Democrats and Republicans in their ongoing battle over the mammoth federal health program. President Obama has repeatedly backed the idea of getting richer seniors to pay more for Medicare, most recently in his 2013 budget proposal. It’s a centrist position that some liberals dislike. They argue that it will ultimately force wealthier seniors into buying their own private insurance and make Medicare a program for the poor.

A new Medicare pilot program that’s designed to replace the original Medicare fee schedules for durable medical equipment saved Medicare and taxpayers $202 million in its first year. Used for products such as wheelchairs, oxygen tanks and diabetic test strips, the new bidding program originally began in 2007 as a study to reduce costs and combat fraud, however, Congress later passed a new law that terminated the study.

Will Privatizing Medicare Work? A Few Clues from Part D Plans May Tell. The Medicare prescription drug program, better known as “Part D,” was the first step towards privatizing Medicare. By all accounts it is successful and should be a model for overall Medicare reform. It gives seniors a choice and it relies on private competition to keep costs under control. By all measures it is coming in well below expected costs. Depending on the outcome of a Supreme Court decision in June, that could all change.

The proposal from Reps. Allyson Schwartz (D., Pa.) and Joe Heck (R., Nevada) scraps the existing formula, gives doctors pay increases for the next four years, and creates new payment models that are designed to be more stable, with variations based on specialty and geography, and for doctors who change how they deliver care.

The Republican’s strength among seniors comes even though he [Romney] has said he generally supports a plan put forward by House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, that would gradually raise the Medicare eligibility age to 67 from 65 and turn it into a voucher-like program where future seniors would receive subsidies to purchase health care on the open market.