If you recall the phrase "donut hole," you understand why I question the facts behind Mr. Butler's superficially true statement. Here's how Reason magazine wrote about it at the time: "The cost is also likely to rise because of demands to close the drug plan's weird gap in coverage: After a $250 deductible, it will pay 75 percent of prescription drug expenses, up to $2,250 a year; but between $2,250 and $5,100, the point at which the plan starts paying 95 percent of costs, there will be no coverage at all." When one runs the numbers, one realizes that (a) Medicare enrollees are reimbursed up to $2,250 per year and (b) at that point, Medicare enrollees reimburse insurance companies for the same amount, up to $5,100. How did this come about?
As you might guess, the insurance industry had a lot to do with it. In fact, it was an insurance industry lobbyist who wrote the bill! Only in America.