The Part D Analogy

by Yuval Levin

Veronique, you note below some similarities between what people had to say about Medicare Part D immediately after its launch and what we’re hearing about Obamacare. A lot of defenders of Obamacare have pointed to this analogy too, suggesting that the Medicare prescription-drug benefit started off rough and is now working fine and is popular so maybe Obamacare will be too. 

I think the analogy, such as it is, has been misunderstood, or at least I disagree with what a lot of people have made of it. Medicare Part D was a much, much simpler undertaking than Obamacare: it was a new benefit added to an existing federal program, a fairly simple additional insurance product (as it pays for goods rather than services), and there was not a need to achieve some balanced risk pool in the program. Outreach was a matter of getting to people who were already Medicare beneficiaries, so Medicare’s administrators and contractors knew who they were, where they were, what their circumstances were, and it was a matter of making them aware of their options. The demands it made on the mechanisms of the administrative state and the expectations it evinced of the abilities of the administrative state were just not in the same ballpark as Obamacare, which is much more complex on every level. And yet even the much simpler Part D program had some significant problems. 

The fact that even a much simpler federal undertaking ran into real problems should lead us to think that Obamacare could well encounter far, far worse and more difficult problems, on a scale that may not be readily addressable — as in fact seems now to be happening. It doesn’t suggest everything will be fine, it suggests the government hasn’t been very good at even much easier tasks than the ones now set before it. 

We don’t know how Obamacare’s launch will end up at this point, but I don’t think there’s much solace at all for its champions to be had by looking at the problems CMS had rolling out a prescription-drug benefit for Medicare.

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