File this in the "Titanic Sinks Less Quickly" category. The Wall Journal Journal editorialized yesterday on the fact that there are more choices and lower costs as a result of some of the competitive mechanisms passed in the 2003 prescription drug benefit.
If you’re looking for some good news from Washington, consider this semi-miracle: The Medicare prescription drug benefit is so far costing less than anticipated, while seniors are getting more insurance options at lower prices. Lesson: Maybe private competition works.
This doesn’t mean we’re changing our minds that the new drug entitlement was a policy mistake at an estimated long-term cost of $8 trillion, give or take a trillion. But now that the program exists, it matters whether it turns into another price-controlled, one-size-fits-all federal entitlement, or whether the seeds of market competition planted in the bill are allowed to grow.
The early returns are encouraging, on both price and choice. Over the weekend insurers began marketing their 2007 Medicare drug plans, and all states except Hawaii and Alaska have more than 50 private options available Ã¢â‚¬â€œ up from an average of about 40 in 2006. Seventeen insurers are selling nationwide plans, up from nine this year. That compares with the one or two that critics of including private plans predicted would be available in many markets.
The average monthly premium that seniors pay is again $24, far lower than the $37 originally estimated by government actuaries.
Of course, 72 percent of seniors already had private drug coverage when the massive new entitlement bill was passed. No doubt, though, this is a drop of good news, and it should entice Congress to restructure the Medicare program with competition and markets in mind.