The Case for Guaranteed Access to Prescription Drugs

The Case for Guaranteed Access to Prescription Drugs

December 15, 2016

Everyone complains about the prices of prescription drugs. Yet, 60 percent of us use them, because they help relieve our pain, improve the quality of our lives, and extend our lifespans. The older we are, the more prescription drugs we consume — and not only because older people usually have more healthcare issues. Equally important, older Americans have guaranteed access to Medicare-backed private insurance coverage for their prescriptions through Medicare Part D plans.

My advice for Medicare “reformers” emboldened by the recent elections is to keep your hands off Part D. Here’s why: Prescription drugs can now treat millions of people for conditions that otherwise would require other costly medical procedures and services, saving taxpayers tens of billions of dollars.

Last week, the Progressive Policy Institute published a new analysis I did of the operations and finances of the Part D program. We reviewed the many, many studies that have investigated the effectiveness and costs of prescription drugs. One particularly extensive analysis found that each prescription filled or refilled by a Medicare beneficiary lowered other healthcare costs by $104 in 2000, or by $173.61 in 2014. We also know from the Kaiser Family Foundation that Americans ages 65 and older fill and refill prescriptions, on average 27.9 times per year.

Based on these findings, I estimate that the use of prescription drugs by the 23.4 million Americans people covered by Part D plans in 2014 saved the Medicare system an average of $4,844 each, or $113.5 billion altogether. Because Medicare Part D cost taxpayers $68.4 billion in 2014, this access to prescription drugs saved taxpayers $69.6 billion in 2014, on a net basis. Include as well the 14.4 million beneficiaries with drug coverage through Medicare Part C Advantage plans, and the use of prescriptions drugs by Medicare beneficiaries in 2014 produced a net savings for taxpayers of $110.2 billion. This is compelling evidence that misguided efforts to cut federal support for Part D and Part C would cost lives and drive up Medicare costs.

To learn more, go to The Value of the Part D Program for Its Beneficiaries and the Medicare System.



Republican Presidents and Inequality

December 9, 2016

The new findings on growing inequality by Thomas Piketty, Emmanuel Saez and Gabriel Zucman are deeply disturbing. They demonstrate again how extreme overall inequality has become in America. The top 1 percent’s share of all pretax income went from 10.7 percent in 1980 to a little over 20.2 percent in 2014, while the share claimed by the bottom 50 percent fell from 19.9 percent in 1980 to 12.5 percent in 2014.

But that’s not the whole story. I looked into their data, which cover five presidents from 1980 to 2014, and found that both the gains at the top and the losses by the bottom half varied a lot across those presidencies. Fully 73 percent of the gains by the top 1 percent happened from 1980 to 1992 and from 2000 to 2007, when Ronald Reagan, George H.W. Bush and George W. Bush held the White House. Moreover, the income share of the rich virtually stagnated from 2007 to 2014, mostly under Barack Obama. Equally important, 71 percent of the decline in the share of total income claimed by the bottom 50 percent also happened during Reagan and the two Bushes — and again, under Obama, their share in 2014 was virtually the same as it was in 2011.

Politics and policy matter, so income inequality worsened much more under Reagan and the two Bushes than under Bill Clinton and Obama. The final tally: Republicans held the White House 57.6 percent of the time examined here, and 72 percent of the increase in inequality happened during their terms. Democrats held the White House 42.4 percent of the time here, and only 28 percent of the increase in inequality happened on their watches.

Sadly, it’s all too easy to imagine how the top 1 percent and the bottom 50 percent will fare under Donald Trump.