• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • No Public Plan Option in Medicare Part D

    Rep. Hoyer talking to President Obama

    Last Sunday, in an appearance on FOX News Sunday with Chris Wallace, House Majority Leader Steny Hoyer (D-MD) repeated yet another justification for including a “public plan” option in health care legislation. Since other advocates of a public plan have recently been offering the same justification, it is worth taking a moment to point out that the claim is factually incorrect.

    HOYER: Chris, can I just say something? When they adopted a prescription drug program, they provided for the possibility of a public option in their own plan if it wasn’t available

    While liberals certainly wanted to include a “public plan” option in the Medicare Part D prescription drug program that Congress enacted in 2003, in fact the final legislation did not include such an option. Indeed, it actually contained a provision explicitly preventing the offering of Medicare drug coverage through a “public plan.” Specifically, section 1860D–41(a)13 of the “Medicare Prescription Drug, Improvement, and Modernization Act of 2003,” (42 U.S. Code §1395w-151(a)13) defines the entities that may sponsor a Medicare prescription drug plans in a manner that disqualifies any “governmental entity” from being a plan sponsor. The provision reads:

    PDP SPONSOR — The term ‘PDP sponsor’ means a nongovernmental entity that is certified under this part as meeting the requirements and standards of this part for such a sponsor.

    While the law does include provisions for “fallback” plans, the statutory prohibition on government entities being plan sponsors applies to both any regular plan and any fallback plan. Furthermore, section 1860D–11(g)(1)(B)v of the law also specifically prohibits HHS from entering into a contract with a single entity to provide fallback plans throughout the country (42 U.S. Code §1395w–111(g)(1)(B)v). The idea of a fallback plan was included because, prior to the MMA, there were no such things as “stand alone” prescription drug plans. Although there was great confidence that the private sector would respond enthusiastically to the new program — which happened, causing liberals to then complain that there were too many choices for seniors — no one really knew for certain how many plans would enter the market or whether there would be competing plans offered in sparsely populated areas. Obviously, those circumstances do not apply in the current debate, since every part the country has long had multiple, competing private insurers offering major medical coverage. In any event, HHS never needed to use the provisions in MMA permitting it to contract with private entities to offer “fallback” plans in areas where regular plans were not available, since from the start of the program multiple, qualified, private sponsors applied to offer regular plans throughout the country. Thus, since the inception of the Part D program any Medicare enrollee living anywhere has had a choice of competing, private, “at-risk” prescription drug plans. This is also another example of why it is important to actually read the legislation — just so there is no confusion later.

    Heritage fellow Dennis Smith c0-authored this post.

    Posted in Obamacare [slideshow_deploy]

    4 Responses to No Public Plan Option in Medicare Part D

    1. Walt, Boca Raton, FL says:

      Though there are many problems with Medicare part D, the main problem is formulary restriction. If the non-abusable drugs were avilable over the counter, this would allow greater choice for the consumer at a lower cost. Physician try to prescribe medications that are once a day rather than multiple times a day in order to enhance compliance but if that medication is too expensive they will still be non compliant. If the the patient had a choice available to them such a medication to take four times a day at a cost of nickel per day rather then the 3 dollar pill which is taken once a day, this would significantly affect the costs of ones healthcare. Medications for asthma, COPD, hypertension, hyperlipidemia, diabetes have little potential for abuse. The patient can get recommendations from the physician and with this model could get advise from the pharmacist. The individual could then take the receipt for the medication and submit to medicare part D. The savings can be immense. No longer would resources be wasted on prior approval and authorizations. There would be less medications that would require secure storage which plays a role in overhaed that is pat on to consumers. There would be a decrease in physician visits necessary for medication renewal if patient is stable.

    2. Pingback: No Public Plan Option in Medicare Part D « Conservative Thoughts and Profundity

    3. Barb -mn says:

      For seniors, the only plan they should have is everything that's needed is insured.

      It's confusing for me and I'm not a senior. My father is and I can't believe what he is put through.

    4. Barb -mn says:


      Let the free market do the rest since it is evident for citizens of a free society, to be more efficient and trustworthy.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.