Letter Questions Claims on Medicare Drug Benefit
An Oct. 4 Wall Street Journal editorial "implies that the private sector is more efficient than Medicare," but "Medicare trustees suggest the opposite," Rep. Pete Stark (D-Calif.), ranking member of the House Ways and Means Subcommittee on Health, writes in a letter to the editor of the Journal. According to Stark, Medicare trustees have found that administrative costs for private plans offered under the Medicare prescription drug benefit "average 12% -- six times Medicare's historic ratio of 2%."
The editorial also maintains that "'competition' is responsible for a decline in the drug program's cost," he writes, adding, "But these reductions are primarily a result of a trend of lower drug spending that is unrelated to Medicare."
Stark writes the editorial maintains that the Department of Veterans Affairs prescription drug program "limits drug access." However, according to Stark, "the VA covers 16,000 prescription drugs on its formulary and ensures access to other drugs when necessary."
Stark writes, "At the behest of Republicans, the government now pays Medicare-sponsored HMOs and other private plans 11% more than would be spent in the traditional fee-for-service program," adding, "If the private sector is so efficient, why do we have to pay it more to do the job?" (Stark, Wall Street Journal, 10/11).