It's incumbent on us to say, rather honestly, that Medicare Part D is working better than expected. More than 90 percent of seniors now have drug coverage, and the poor seniors, who get their drugs through Medicaid, have signed up in record numbers. Yet Medicare Part D is still a bad program.
I've long struggled to explain this, because if something's a bad program, we assume that people won't like it. But satisfaction with Part D is quite high -- and costs are even coming in a bit below estimates. So what gives?
Imagine the government starts up a subsidized cars program. Millions of individuals who don't currently have a car are going to get one, and will only pay 15 percent of the cost. But when the program is actually implemented, it turns out that though everyone is getting an economy car, the government is letting the dealers dictate the prices. So all these $15,000 Civics are costing $35,000.
Now, millions of people just got a brand new car. And they paid only a small amount out-of-pocket for it. And insofar as your aim was to increase mobility, you've succeeded. But the program wasn't a good deal. The government is overpaying for every car by around $20,000. And the program's recipients are getting much less car than they should be for their money. So though the aims are being fulfilled and the folks with subsidized autos are satisfied, everyone involved -- taxpayers, government, and the poor -- are being ripped off while the car dealerships make out like bandits. It's just that it's harder to see the rip-off, and easier to see the new cars.
