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Originally published October 16 2006

Medicare drug prices based on smoke and mirrors

by Jerome Douglas

(NaturalNews) According to Rep. Henry Waxman, D-Calif., the leaders and main proponents of the Medicare system misled senior citizens last month when they collectively said that premiums for drug plans would start at the same level in 2007 compared to 2006.

The staff of Rep. Waxman performed an analysis that showed an average 13.2 percent increase coming in Medicare premiums for 2007. Medicare officials denied the suggestion that prices would increase by that amount, sticking to their estimate that rates would remain relatively unchanged in 2007, as long as beneficiaries of Medicare plans drop traditional Medicare coverage and sign up for an alternative offering, like an HMO plan.

Rep. Waxman's staff examined premiums for stand-alone drug policies only, which were offered for the first time this year. Those plans cover about 16 million Medicare members who get other medical care through the traditional program.

Dan Mendelson, president of Avalere Health, a consulting firm in Washington, said "The only thing everyone can agree on is seniors will need to go out and carefully reassess their options for 2007, because there are fundamental changes in the marketplace."

When asked to respond to Rep. Waxman's analysis, Medicare Chief Mark McClellan said "The congressman's analysis is incomplete and misleading ... measuring just one of the plan options beneficiaries can use to get their prescription drugs."

Consumer health advocate Mike Adams contends that there is no cost-effective option for seniors: "The Medicare drug benefit plan was a profiteering scam from the very beginning it was never about saving money for consumers." Adams then added, "The plan was designed to enrich pharmaceutical companies at the expense of U.S. taxpayers."

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