Hidden Costs of Medicares Prescription Drug Program

-Soutce-The New York Times- At a glance Medicares prescription drug program also called Medicare Part D looks like the perfect example of a successful public-private partnership. Drug benefits are entirely provided by private insurance plans with generous government subsidies. There are lots of plans to choose from. Its a wildly popular voluntary program with 73 percent of Medicare beneficiaries participating. Premiums have exhibited little to no growth since the programs inception in 2006. But the stability in the premiums belies much larger growth in the cost for taxpayers. In 2007 Part D cost taxpayers $46 billion. By 2016 the figure reached $79 billion a 72 percent increase. Its a surprising statistic for a program that is often praised for establishing a competitive insurance market that keeps costs low and that is singled out as an example of the good that can come from strong competition in a private market. Much of this increase is a result of growing enrollment it has doubled in the past decade to 43 million and higher drug prices. But there is also a subtle way in which the programs structure promotes cost growth.