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Commentary

Brouhaha
Grace-Marie Turner, Galen Institute, 2-11-05

Turner takes issue with last week’s story in the Washington Post claiming that the “new Medicare prescription drug benefit will cost more than $1.2 trillion in the coming decade” (or triple the original cost). She believes the reporters used shoddy math and failed to subtract “$468 billion in new federal revenues anticipated from beneficiary premiums, state payments, and Medicaid savings.”

The real net cost of the benefit is $724 billion - with the actual year-to-year costs unchanged from original estimates. Turner is concerned that the new numbers will drive a push for drug price controls, despite unshakable evidence that “price controls haven’t worked because central planners never get the prices right.”

“The only way to continually find the best and lowest prices is through competitive negotiation, which is exactly what is going on with the Medicare discount cards right now.”



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