econ shyte - Services has projected that the premiums would...

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Alexandra Williams Bellner Economics 200 May 28, 2007 Costs Grow for Medicare Drugs Prices for prescription drugs under Medicare private insurance plans have shot up an average of 6.8 percent over the last year, causing private insurers to lose their edge over wholesale rates, which have shot up only a mere 3 percent since December. Premiums for Medicare have risen 13 percent over the past year when the drug plans went into effect. Economist Marilyn Moon explains in the article that when a new plan is introduced, everyone expects good prices, but once a customer base is established, prices tend to increase. The data of price increases was contested by drug manufacturers and health insurers, who accused the Oversight Committee of exaggerating price increases. The Department of Health and Human
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Unformatted text preview: Services has projected that the premiums would stabilize at $24 a month. However, Oversight Investigators state that brand name drugs are so much higher than generics that their cost increases will overshadow the savings from generics. The program’s costs still remain well below initial projections, and experts say that six months of data is not enough to make a conclusive decision about the effectiveness of the program. Ken Johnson, senior vice president of PhRMA, the drug manufacturer’s lobby, states that the new program is saving money overall for both taxpayers and seniors. Though prices may be increasing somewhat, the consumers won’t be terribly affected by the price increases....
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