When Congress passed the Medicare drug-benefit program in 2003, it was attacked fiercely by conservative critics for its colossal cost estimates and by Democrats for not exerting price controls.
The news media reported widely that the program, which took effect in January, was so incomprehensively complex that senior citizens could not understand it. Democrats, most of whom voted against it, ran in opposition to the program this year, promising to end its ban on negotiating prescription prices.
But it turned out the program's costs, thanks to its market-oriented competitive structure, are much less expensive than forecasters estimated, and that it has proven more accessible and understandable than all those pessimistic, doom-and-gloom stories said it would be.
It also turns out that the Democrats -- who demagogued the issue to get votes in the 2006 elections -- may not be able to make good on their pledge to close the so-called "doughnut hole" gap that requires many seniors to pay the full cost of the drugs for several weeks or months before kicking back into the benefit coverage.
For one thing, it appears the savings Democrats said they will get from negotiating lower drug prices won't produce anywhere near the amounts needed to close the benefit gap. For another, Democrats are divided over whether eliminating the gap via price negotiations (which would effectively turn into price controls) is good policy, or whether, as critics say, it will undermine the drug industry's medical innovations, limit choices and drive drug prices higher.
A revealing front-page story this week in The Washington Post by Lori Montgomery and Christopher Lee exposed the post-election confusion in Democratic ranks on this central issue. The article showed how the Democrats invented a specious applause-getting campaign line that had little if any substance behind it. Their lead tells the story:
"It sounded simple enough on the campaign trail: Free the government to negotiate lower drug prices and use the savings to plug a big gap in Medicare's new prescription-drug benefit. But as Democrats prepare to take control of Congress, they are struggling to keep that promise without wrecking a program that has proven cheaper and more popular than anyone imagined."
In fact, some of the Democratic alternatives offered in 2003 had a ban on price negotiating, too. And Democratic Rep. Fortney "Pete" Stark of California, who will become the House's health subcommittee chairman in January, is against an outright ban, seeking a "middle path" instead that would set price ceilings.
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