Waxman Investigates Part D Medicare Drug Plans

When the Democrats took over the Congress I pointed out that not only would they launch a health care legislative agenda of their own but they would also focus on the oversight of existing health care policy.

Their greatest interest was always going to be the new Medicare Advantage plans and the Part D Medicare drug benefit. While the Democrats don't have the votes to repeal either of these popular programs, they do have the ability to impact them in the budget process and in their oversight activities. The House Democratic chairmen (Dingell, Rangel, Stark, and Waxman) tend to be more liberal then many of their Democratic colleagues--particularly the recently elected Dems--and have a far more cynical view of the Republican policy that has given the private markets a substantial stake in the Medicare program (see an earlier post on why the Democrats hate Medicare Advantage).

So it wasn't at all surprising when House Oversight and Government Reform Chair, Henry Waxman, held a hearing looking into the operation of the Part D Medicare Drug plan last Friday.

His specific focus was whether Part D private insurers are passing on the savings from drug price negotiations or whether too much of those savings are being taken in profit. He heard testimony arguing that if the government were in charge of negotiating drug prices it would be clear just how much of the benefit of lower drug prices was being passed on to seniors.

The subject of his first set of Medicare oversight hearings is somewhat surprising since by all accounts the cost of Part D to both the government and to consumers has been less than anyone originally thought it would be.

What will make this interesting is Waxman's promise to ask the HMOs just how profitable their Part D drug plans are.

But as I have said before, this is not so much about the details of the private market in Medicare as it is a deep philosophical concern on the part of these powerful Democratic chairmen that the privatization of Medicare is the wrong way to go.

This will be the first of many attacks on the privatization of Medicare in preparation for an even more direct assault on what was a centerpiece of Republican health care policy--using the private market to "modernize" Medicare.