WASHINGTON -- The Republicans who created a prescription-drug benefit for Medicare four years ago said private health insurers would be more efficient than the federal government at providing the coverage. Now Democrats say they have proof that isn't the case.
A new analysis, compiled by congressional investigators at the request of Rep. Henry Waxman (D., Calif.) and set to be released in the coming week, said private insurers selling Medicare-funded drug coverage aren't getting "significant" discounts from drug makers and that the discounts they receive aren't always shared with Medicare beneficiaries.
The report said taxpayers and Medicare beneficiaries would have saved almost $15 billion this year if the drug plans had administrative costs similar to traditional Medicare's hospital and physician coverage, and discounts on drugs similar to those obtained by the government in Medicaid, the state-federal program for the poor.
The analysis is likely to touch off debate on Capitol Hill over changes that many Democrats want to make to the Medicare drug program. These include giving the government authority to bargain with drug makers for lower prices and reducing out-of-pocket costs for beneficiaries.