Unhealthy competition

MEDICARE’S NEW DRUG BENEFIT could be improved if most of the plans offering it failed. Currently dozens of providers participate in the program in Southern California alone; winnowing the field to, say, 10 would give beneficiaries a more manageable set of choices. Larger providers would have an easier time seeking discounts on popular drugs, which could make monthly fees and co-payments lower. And competition would be more meaningful if consumers could more clearly see the differences among plans.

Unfortunately, costly taxpayer subsidies prop up the plan providers, increasing the choices but sowing confusion among those the benefit is supposed to help. Right now the market is so chaotic that it’s counterproductive; many providers are changing their terms and prices weekly before the benefit starts on Jan. 1.

These changes are also adding to the frustration of those trying to pick a plan. Most experts advise consumers to keep shopping for the best deal on the Medicare website right up until the deadline, since after they make a final choice they’ll be locked in for a year.

There is one proposal that would thin the marketplace and reduce some of the confusion. Several Democrats in the House and Senate are sponsoring bills that would allow Medicare itself to become a competitor, armed with the power to bargain for discounts as the Veterans Administration already does successfully. Medicare is a trusted brand with overhead costs in the low single digits, compared with up to 30% for private healthcare companies.

Now that would be one tough competitor, able to cover more people and more drugs for less money. It’s also the plan that pharmaceutical companies spent ferociously to defeat in 2000, in favor of the unnecessarily costly and profit-preserving plan that Medicare recipients and taxpayers are stuck with now.

Still, those who have time on their hands might want to contact their members of Congress and say a kind word about Senate Bill 873 and House Resolution 752, companion measures known together as the Medicare Prescription Drug Savings and Choice Act. The bills will no doubt stay buried and blocked, as they were last year. But a good idea deserves a pat on the back, and the House and Senate websites are quicker to navigate than the Medicare site.