Democrats' Part D Opportunity

07/21/2011 05:10 pm ET | Updated Sep 20, 2011
  • Doug Schoen Founding Partner; Penn, Schoen, and Berland

Quite rightly, the Democratic Party has long been considered the party of Medicare. The giant health coverage program for the elderly and disabled was created by a Democratic president and initially passed by a largely Democratic Congress over stiff opposition from Republicans. When Republicans proposed gutting Medicare -- first in 1980s budget debates and again following the 1994 Republican takeover of Congress -- Democrats have stood firm to defend it.

Despite this, the second Bush administration's efforts to push legislation adding a prescription drug benefit to Medicare changed the calculus, made many seniors take a second look at Republicans, and contributed to Bush's 2004 election victory. Now, in the midst of budget talks, the way the party deals with that same drug benefit will determine whether Democrats can retain their credibility as the Party of Medicare or surrender the program's future to its historical antagonists in the Republican Party. If Democrats want to win elections, they should eschew proposals to cut the drug benefit and, instead, embrace it as a model for improving the program.

Consider the following: The Medicare drug benefit, officially called "Medicare Part D" has proven successful on multiple fronts. It has come in under budget every year that it has existed (costs are 46 percent below initial estimates) and charges lower premiums than projected. Beneficiaries choose between a wide range of privately administered plans and even the least expensive options provide some coverage for any drug a doctor suggests. Since the right medicines keep people in better health, most measures of overall patient wellness have trended upwards since the drug program began. Satisfaction is high: in senior-heavy Florida, 93 percent of those receiving Part D like it. Quite simply, the plan is a political winner.

That's why Democrats and Republicans alike (but Democrats most of all) need to be cautious of proposals that would upset this arrangement. In particular, suggestions that would hike premiums for seniors, force drug manufacturers to make new special payments to the government, and limit seniors' choice of medicines just don't make sense. Democrats once favored some of these things, but supporting them today will let Republicans paint themselves as Medicare's true defenders. Already, Republican attacks on Medicare reforms in President Obama's health care bill cost Democrats the senior vote and control of the House of Representatives in the 2010 elections. Foolish cutbacks to Part D could put Republicans forever in the Medicare drivers' seat. A recent letter sent to White House and Congressional officials by Governors O'Malley (Md.), Purdue (N.C.) and Tomblin (W.Va.) serves as a reminder of the importance of preserving the program to avoid negative political and economic consequences at the state level.

Instead of playing into Republicans' hands by calling for destructive changes to the drug benefit, Democrats should borrow Republicans' good ideas and make it clear that they want to use Part D, along with care coordination, chronic disease prevention and innovation programs as models for improving Medicare as a whole. For example, Part D's success in containing costs without explicit price controls strongly suggests that some price controls included in the 2010 health care bill under the guise of an "Independent Payment Advisory Board" ought to go. Likewise, Part D's emphasis on wellness suggests that proposals that cut or disrupt other non-hospital alternatives -- especially requiring seniors and disabled Americans to pay a co-pay for quality home health care -- may appear penny wise but will quickly prove pound (and politically) foolish. Finally, the drug program's decision to let consumers pick their own plans rather than enrolling everyone in a single government-designed option has both improved satisfaction and contributed a great deal to the plan's superior financial surprises.

Whatever happens in the budget debate, Democrats, simply by virtue of their control of the White House, will almost certainly be getting credit (or blame) when it comes to Medicare Part D. If they preserve, expand and enhance the drug benefit by using it as a model for future reform -- something Republicans have been reluctant to do -- the Democratic Party will retain its rightful place as the Party of Medicare. If, on the other hand, Democrats give in to elements within the party that want to gut the program, they will take a well-deserved drubbing at the polls for opposing a successful, popular, cost-effective undertaking. Medicare Part D, a successful, Republican-originated expansion of health care for older and disabled Americans, is a program that Democrats should wholeheartedly embrace.