What now (post-election thoughts)

There is no doubt that changes will come, post-election. Nancy Pelosi is said to be planning to pass a bill to allow CMS to "negotiate" drug prices with drug companies, so we can expect CMS to have almost as many happy drug vendors under contract as it has doctors.

The Medicare Part D design, which has come in for a lot of criticism, deserves a second look, before it is junked. Overlooked by all (critics and friends alike) is the fact that the Part D design, like the old floor wax/salad dressing commercial, is in fact two designs in one. One part, the basic subsidy part, provides a subsidy for all participants. This could have been handled more efficiently or more directly (why not just a voucher to the neediest?) but congress decided to maintain the principle of equal coverage for all that is supposed to be a strength of Medicare. The second part is a high deductible, catastrophic plan that kicks in when drug expenditures reach a certain level. In between the two parts, there is no coverage (the so-called "donut hole"). Covering the donut hole would be cost prohibitive (not that the cost of the basic plan is exactly cheap, although we should note that it is a lot less than the CMS actuaries predicted....a subject for another posting later). Instead of focusing on the fact that the plan design is a compromise, and that it rather efficiently achieves several goals, the focus has been on the donut hole. So there will likely be a single plan design (just like Part A and Part B), instead of the large number of choices currently available, with cheap medications assured by CMS setting prices for drug companies.

More thoughts on the future shape of medical insurance to come....