The “Plan D” Medicare drug benefit came with so much confusion about deadlines, costs and gaps in coverage that one critical article (Nation, 1/30/06) was headlined “Plan D From Outer Space.” Perhaps critics’ biggest question: Why is the government forbidden to negotiate with the drug industry for lower prices? That idea makes so much sense that drug companies have been mounting a major effort to derail it, especially now that it’s been taken up by some congressional Democrats.
A January 7 New York Times article—“Democrats’ Drug Plan Has Pitfalls, Critics Say,” by Robert Pear—seemed to be one success of this effort. The piece suggested that Medicare negotiating prices with drug companies would force the government to steer people to particular drugs, thus limiting choices. As Dean Baker pointed out in his blog Beat the Press (1/7/07), that’s akin to saying that the beer industry would limit consumers’ choices by offering domestic beer at half the price of imported, since the lower price would certainly “steer” some consumers in that direction.
On the same page, Pear had another article, headlined “Medicare Drug Program Costing Less Than Estimates, U.S. Says.” This piece celebrated the White House’s 10 percent reduction in its forecast of the plan’s cost, saying this would help Republicans make the case that the program should be maintained as is. The article doesn’t mention that the reduced estimate is still far more than the White House had originally forecast the program to cost (Extra!, 1-2/07). And it obscured even more critical information: the fact that the program’s cost estimate is lower because fewer people are finding it a good enough deal to sign up for!
So the fact that not as many people like the White House plan as predicted is a point in its favor, whereas the idea of the government getting lower prices from the industry is suspect. It’s clear that the New York Times is trying hard to sell us something, but why we should buy it is hard to figure.