Last week, former Bush Health and Human Services Secretary Michael Leavitt offered a very instructive look back at the rollout of the Medicare Part D prescription drug program. In what the Washington Post's health care reporter Sarah Kliff praised as a "great piece," Leavitt recounted the technical troubles, process pitfalls, rapid responses and lessons learned from the launch of Part D ("To implement Obamacare, look to Bush's Medicare reform"). In his not-so-subtle digs at the Obama White House and the Affordable Care Act, Leavitt predictably lectured, "To succeed, it should learn from our experiences with Part D—what we did well and where we fell short."
But just as important as Leavitt's useful recommendations about educating the public, preparing for technology breakdowns, anticipating subsidy errors and avoiding finger-pointing are the lessons he and his fellow Republicans prefer remain unlearned about the Medicare drug program.
1. President Bush initially opposed it. On Jan. 1, 2006, the federal government launched Part D, which enabled the nation's 43 million Medicare beneficiaries to get subsidized prescriptions through a choice of private insurance plans. But in early 2003, the Bush administration was opposed to providing the new benefit to those enrolled in traditional Medicare (that is, 85 percent of all recipients). Instead, those wanting to gain the drug benefit would have to switch to an HMO or private Medicare Advantage plan. As the New York Times explained in March 2003:
The Bush administration backed away from its idea to offer no drug benefits to elderly people in the traditional fee-for-service Medicare program. But drug benefits available through private plans would be far more extensive, so Medicare recipients would have strong incentives to join private plans.
It was only the overwhelming public opposition to Bush's Medicare privatization agenda that forced Republicans to make the prescription drug benefit available to all Medicare recipients. It was with an eye towards the 2004 elections that House Majority Leader Tom Delay warned his recalcitrant colleagues:
"We must forget about ideological absolutes."
2. Medicare Part D was not paid for.
When it was passed in December 2003, the new Medicare drug benefit was forecast
by the Bush administration to cost $395 billion over its first decade. To pay for the program, President Bush and his GOP allies did—wait for it—nothing.
As Utah Sen. Orrin Hatch admitted in 2009, during the Bush years:
"It was standard practice not to pay for things."
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In contrast, the nonpartisan Congressional Budget Office has forecast that with its cost savings and new revenue sources, the Affordable Care Act will reduce the national debt over the next two decades. In response, House Majority Leader Eric Cantor, who voted for Medicare Part D, denounced the CBO for "budget gimmickry."
3. The Bush White House lied to Congress about the cost. Within two months of signing the Medicare Modernization Act (MMA) into law, President Bush quietly informed Congress that the true cost of the program would be $550 billion, not $395 billion, over the next decade. When Medicare actuary Richard Foster sought to present the true price tag to Congress in late 2003, then agency chief Thomas Scully threatened to fire him. By the time the program was launched in 2006, the estimated 10 year price tag for the Medicare prescription plan had increased to $720 billion.
As the New York Times reported later in 2004, the GAO ultimately concluded that the Bush administration "illegally withheld data from Congress on the cost of the new Medicare law" and that Scully "should repay seven months of his salary to the government." While Scully was later fined for other ethics violations, he was never held accountable for his role in the Medicare fraud. Today, Thomas Scully "now works for a law firm and a private investment firm, has registered as a lobbyist for Abbott Laboratories, Aventis Pharmaceuticals, Caremark Rx and other health care companies."
4. Part D costs could have been lower. Mercifully, those dire forecasts in 2006 did not come to pass. But it was much lower enrollment (77 versus 93 percent) and the rapid adoption of generic drugs, rather than "competitive mechanisms" which largely explain the lower Medicare Part D bill for taxpayers.
But the costs to Uncle Sam could have been much lower. Then as now, Democrats wanted the federal government to negotiate directly with the pharmaceutical companies and pass the savings onto the Treasury and beneficiaries. In November 2005, a report released by Democratic staff on the House Government Reform Committee showed that under the new Medicare plan, prices for 10 commonly prescribed drugs were 80 percent higher than those negotiated by the Veterans Department, 60 percent above that paid by Canadian consumers and still 3 percent higher than volume pharmacies such as Costco and Drugstore.com. The report concluded that:
"The prices offered by the Medicare drug plans are higher than all four benchmarks, in some cases significantly so. This increases costs to seniors and federal taxpayers and makes it doubtful that the complicated design of Medicare Part D provides any tangible benefit to anyone but drug manufacturers and insurers."
Which is exactly as Louisiana Republican Billy Tauzin
designed it. Just months after shepherding the Medicare prescription bill he wrote through the House, Tauzin, the chairman of the Energy and Commerce committee, left Congress and accepted a $2 million-a-year job as president of PhRMA
-- the Pharmaceutical Research and Manufacturers of America.
The MMA's ban on Medicare negotiating better prices directly with the drug companies is the key reason why only 16 Democratic House members voted for it.
5. Part D would not have passed without Tom Delay's ethics violations. Tom Sculley wasn't the only Bush administration rule-breaker who ethics violations made passage of the Medicare drug benefit possible.
As you may recall, Tom Delay twisted arms and extended debate on the bill by hours in order to ensure passage. But that wasn't all, as CBS News recounted Delay's reprimand from the House ethics committee:
The investigation, by a four-member subcommittee, was triggered when the retiring [Nick]Smith said that unidentified lawmakers and business interests promised substantial money to his son's congressional campaign if he voted for the Medicare legislation. Smith said the same interests threatened to support other candidates if he didn't change his vote from "no" to "yes."
6. Democrats improved Medicare Part D.
The committee found DeLay "offered to endorse Representative Smith's son in exchange for Representative Smith's vote in favor of the Medicare bill. In the view of the investigative subcommittee, this conduct could support a finding that Majority Leader DeLay violated House rules."
In his Washington Post
screed, former HHS Secretary Leavitt declared, "Part D and the Affordable Care Act resulted from contentious negotiations and fierce legislative battles." That statement is true in much the same way that a Yugo and a Mercedes are both cars.
After all, it's not just that only three GOP senators and zero House members voted for the Affordable Care Act. House Republicans have voted 39 times since 2011 to repeal the ACA. Meanwhile, Democrats opposed the Part D legislation because they wanted to make it better. And since 2003, they have. After all, it was Obamacare which has reduced the costs of the so-called "donut hole" which left Medicare recipients with the steep out of pocket costs for their prescriptions. And over 30 million Medicare recipients have taken advantage of new preventive services now covered by the ACA.
As Sarah Kliff noted back in June:
Eight years ago, the federal government rolled out Medicare Part D, a prescription drug benefit. For the first time ever, Medicare was launching a benefit administered exclusively through private health insurance plans. The benefit was not popular: In the spring of 2005, when enrollment efforts ramped up, polls showed Medicare Part D to be less popular than the Affordable Care Act. Fewer Americans felt they understood how it worked, too.
Things have improved, and not just because of the efforts of officials like Mike Leavitt. Unlike the Republicans still trying to kill the Obamacare, Democrats helped make Medicare and its Part D prescription drug benefit better.