The cost of prescription drugs for many seniors is falling, thanks to policies enacted by former President George W. Bush, according to government data released Friday.
The government-subsidized prescription drug plan, known as Medicare Part D, will cost seniors an average $30 a month in 2012, down from $30.76 this year, the Los Angeles Times reports.
That's true even when overall healthcare costs are going up thanks to President Barack Obama’s healthcare overhaul legislation.
The Part D drug benefit lets those on Medicare sign up for a privately administered, government-subsidized health plan to get their prescriptions.
Popular with beneficiaries, the program is cheaper than once forecast because it allows private plans to compete and also increases the use of generic drugs.
By comparison, overall healthcare spending in the U.S. is expected to grow by nearly 5 percent a year between now and 2014, according to the latest estimates by government actuaries, the Times adds.
Supporters say the numbers bolster the argument that private-sector solutions lower healthcare costs.
"When Part D was launched, liberal pessimists argued vociferously that the program would fail, because seniors would be 'too confused' to choose amongst a blizzard of plans," Avik Roy, an equity research analyst at Monness, Crespi, Hardt in New York City, writes in a Forbes column.
"It is just one more example of the fatal conceit that average Americans aren’t competent enough to manage their own affairs, and that central planners can do better."
A new study shows the Plan D program is also keeping seniors out of hospitals and nursing homes, saving the government $12 billion a year in the process.
"This is what people always hope for: If people get drug coverage, they won’t need hospitalization," says Marsha Gold of the nonpartisan Mathematica Policy Research, according to the Associated Press. "If it holds up, that’s great news."
The study, conducted at Harvard University, finds that Medicare saved an average of about $1,200 a year for each senior citizen who had inadequate drug coverage before Medicare Part D.
Other savings come from getting seniors drugs for ailments such as high cholesterol, high blood pressure pills or injectable clot-busting treatments for deep vein thrombosis, which would otherwise be treated in a more expensive emergency room visit, says Dr. Michael McWilliams, of Harvard Medical School.
"Spending on one type of service can reduce spending on another type of service," Dr. McWilliams says, according to the Associated Press. "By expanding Medicare to include drug benefits, clearly we’re spending more, but we’re getting a lot of value out of that spending."
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