Hatch Statement on CBO Part D Report
WASHINGTON – U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, issued the following statement on CBO’s Part D Report entitled, Competition and the Cost of Medicare’s Prescription Drug Program, which outlines the reasons why the program has cost less than expected:
“This report shows why a Medicare prescription drug program that promotes innovation, competition and lower costs is the right prescription for America’s seniors. Successfully serving more than 39 million seniors, CBO finds that it spends almost 50 percent less than estimated over a decade ago. Unfortunately, CBO could have done more in this report to fully examine the impact of Washington-mandated price controls on this successful program, especially as it relates to access to life-saving drugs, the negative impact on cutting-edge innovation and the significant cost shift to private sector employers.”
- Spending in the Medicare Part D program is about 50 percent lower in 2013 than predicted by the Congressional Budget Office (CBO) when the Medicare Modernization Act became law in 2003.
- In 2013 alone, Medicare Part D covered 39 million seniors.
- Private sector competition in Part D is key to its success - plans in regions with more competition tended to have lower bids and premiums than those in regions with fewer plan sponsors.
- Implementing Medicaid’s statutory rebates for Part D beneficiaries with low income, would result in lower incentives for innovation in medical research and development, and higher prices for non-government payers.
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