So are Republicans right? Have costs for the Medicare Part D Privatized Prescription drug program come in under what the CBO originally estimated they would be back in 2006? Absolutely.
Is this because of increased competition as Paul Ryan and conservative Republicans who now want to privatize all of Medicare say? Absolutely not.
The table below provides a comparison of costs between what the CBO projected the prescription drug program would cost the American taxpayer and what it actually ended up costing. ( Sources: CBO and Medicare Trust Fund Reports)
|CBO Estimated Costs||46.8||74.8||84.2||92||101.3||110.6|
So what happened? Why were the cost about a third lower than the CBO projected they would be. That’s pretty easy. The taxpayer costs of the program were less because about a third fewer people enrolled in Medicare Part D than the CBO expected. In 2006, the CBO assumed 38 million Americans would participate in the new Medicare Prescription Drug Program ; but only 22.6 million did. By 2010, the CBO assumed 41 million would be enrolled in the Program, but only 27.7 million were.
The CBO projected that approximately 87% of all people eligible for medicare part A would enroll in Part D. But that did not happen. Instead, between 60-65% of all seniors enrolled in Medicare Part D and this pretty much explains why the taxpayer costs were less than the CBO had projected they would be.
And it fact, premium costs for seniors enrolled in this program went up pretty fast. Faster than inflation.