Part D is the Free Market Beachhead in Medicare
February 15, 2017
Medicare Part D has successfully used market mechanisms such as competition and consumer choice to improve access to affordable prescription drug coverage. As a result of market negotiations between insurers and pharmaceutical companies, in the first decade of program, total Part D costs were $349 billion less than projected estimates – an achievement unprecedented for a government program.
Those in the progressive movement remain ideologically opposed to the free market structure of Medicare Part D and are determined to undermine it. They continue to press for “mandatory rebates,” a government price control that could raise the premiums seniors pay by as much as 40 percent.
Additionally, demands for government negotiation of Medicare drug prices were once again included in President Obama’s 2017 budget and are a populist theme in presidential campaign rhetoric. Yet the Congressional Budget Office (CBO) has consistently stated that such a proposal would not score any savings, concluding that the government would not be able to negotiate prices that are more favorable than those obtained by current free market negotiations, unless they were to also restrict access to needed medicines.
In support of government negotiation, proponents often mention the Veteran’s Administration as a model of comparison. Mia Heck, Director of the American Legislative Exchange Council’s Health and Human Services Task Force has noted that the VA “employs a process of ‘negotiation’ that is founded on restricting access to newer and more effective treatment for veterans. What typically makes the final formulary is the cheapest option for the Department, and does not include many of the exciting, more promising medical innovations that have recently come to market.” A 2015 analysis by Avalere Health notes that the VA National Formulary does not offer access to nearly one-fifth of the top 200 most commonly prescribed Medicare Part D drugs. We reject rationing as an appropriate means of achieving savings.
Another assault on Part D has been proposing to force Medicare beneficiaries who receive the low income subsidy (LIS) to accept generic drugs despite what their physician deems most clinically appropriate. We reject the principle, so prominently embodied in the Affordable Care Act that the government should be allowed to come between patients and the best medical judgement of their doctors.
Part D is the free market beachhead in Medicare. The program is a successful template for broader healthcare reform and for the efficient delivery of benefits at many levels of government. On behalf of the millions of Americans that our organizations represent we urge you to reject efforts to weaken and undermine Part D.
Sincerely,
Senator Jim Buck (IN-21)
American Legislative Exchange Council National Chairman
Chairman, Commerce, Economic Development & Technology Committee
Ranking Member, Utilities Committee
Senate President Wayne L. Niederhauser (UT-9)
Chairman, Legislative Management Committee
Board Member, ALEC
Representative Jason Saine (NC-97)
Vice-Chairman, House Appropriations Committee
Co-Chairman, Joint Legislative Committee on Information Technology \
Board Member, ALEC
Senator Leah Vukmir (WI-5)
Former American Legislative Exchange Council (ALEC) National Chairman
Senate Assistant Majority Leader
Chairman, Committee on Health and Human Services
Vice-Chairman, Committee on Judiciary and Public Safety
Senator Joel Anderson (CA-38)
Vice-Chairman, Elections and Constitutional Amendments
Vice-Chairman, Public Safety
Board Member, ALEC
Representative Alan Clemmons (SC-107)
Chairman, House Rules Committee
Board Member, ALEC
Senator Andre Cushing (ME-10)
Assistant Senate Majority Leader, Maine Senate
Board Member, ALEC
Representative David Frizzell (IN- 93)
Assistant Majority Floor Leader
Chairman, Family, Children and Human Affairs Committee
Board Member, ALEC
Speaker William Howell (VA-28)
Chairman, Rules Committee
Board Member, ALEC
Representative Phil King (TX-61)
Chairman, State and Federal Power and Responsibility Committee
Board Member, ALEC
Representative John Piscopo (CT-76)
Board Member, ALEC
Senator William Seitz (OH-8)
Board Member, ALEC
Senate President Susan Wagle (KS-30)
Chairman, Interstate Cooperation Committee
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Speaker Linda Upmeyer (IA-54)
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ALEC State Chair of Alabama
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Senator Larry Crowder (CO-35)
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Senator Judson Hill (GA-32) (Until 02/13/2017)
Former Chairman, ALEC Health and Human Services (HHS) Task Force
Senator Lee Heider (ID-24)
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Senator Steve Vick (ID-2)
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ALEC State Chair of Idaho
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Public Health Committee
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Representative Kim Ferguson (MA-1st Worcester)
Senator Gail Bates (MD-9)
ALEC State Chair of Maryland
Delegate Susan Krebs (MD-5)
Member, Health and Government Operations Committee
Member, ALEC Health and Human Services (HHS) Task Force
Assemblywoman Robin Titus, MD (NV-38)
Chairwoman, Assembly Natural Resources, Agriculture and Mining Committee
Vice-Chairwoman, Assembly Health and Human Resources Committee
Representative Jon Bumstead (MI-100)
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Vice-Chairman, Health Policy Committee
Representative Michael Webber (MI-45)
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Senator Mary Kiffmeyer (MN-30)
ALEC State Chair of Minnesota
Representative Nick Zerwas (MN-30A)
Health and Human Services Finance member
Senator Roger Webb (MT-23)
Vice-Chairman, Joint Health and Human Services Committee
ALEC State Chair of Montana
Representative Donny Lambeth (NC-75)
Chairman, Health Committee
Senator Louis Pate (NC-7)
Deputy President Pro Tempore
Co-Chairman, Appropriations on Health and Human Services (HHS) Committee
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Representative Dennis Riddell (NC-64)
Vice-Chairman, Appropriations Committee
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Representative Michael Vose (NH-9)
Assistant Majority Leader
Committee on Science, Technology and Energy
Representative Yvette Herrell (NM-51)
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Former House Speaker Don L. Tripp (NM-49)
Representative Louis Blessing (OH-29)
Chairman, Government Accountability and Oversight
Representative Andrew Brenner (OH-67)
House Education Committee
Senator Bill Coley (OH-4)
Vice-Chairman, Finance Committee
Chairman, Government Oversight and Reform Committee
ALEC State Chair of Ohio
Senator John Eklund (OH-18)
Chairman, Criminal Justice Committee
Representative Brian Hill (OH-97)
Chairman, Agriculture and Rural Development Committee
Senator Matt Huffman (OH-12)
Senate Committee on Rules & Reference
Representative Lou Terhar (OH-30)
Member Armed Services, Veteran Affairs, and Public Safety Committee
ALEC State Chair of Ohio
Representative Andrew Thompson (OH-95)
Chairman, Finance Subcommittee on Agriculture, Development, and Natural Resources
Senator Joseph Uecker (OH-14)
Chairman Local Government, Public Safety and Veterans Affairs Vice Chair Government Oversight and Reform Committee
Representative Ron Young (OH-61)
Chairman, Economic Development Commerce and Labor Committee
Senator Kim David (OK-18)
Chairwoman, Appropriations
ALEC State Chair of Oklahoma
Representative Harold Wright (OK-57)
ALEC State Chair of Oklahoma
Senator Seth Grove (PA-196)
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ALEC State Chair of Pennsylvania
Representative Jim Stalzer (SD-11)
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Senator Bill Ketron (TN-13)
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Delegate R. Steven Landes (VA-25)
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Senator Peg Flory (VT- Rutland District)
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Representative Brad Klippert (WA-8)
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Senator Mike Padden (WA-4)
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Senator Tom Takubo, D.O. (WV-17)
Chairman, Economic Development Committee
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Mr. Rea S. Hederman, Jr.
Executive Vice President, The Buckeye Institute
Don Racheter, Ph.D.
President, Public Interest Institute
Ms. Beverly Gossage, HSA/HRA Specialist
President, HSA Benefits Consulting
Mr. Charlie Katebi
Health Policy Analyst, Wyoming Liberty Group
Mr. Dan Weber
Founder and CEO, Association of Mature American Citizens (AMAC)
The MacIver Institute
