Why the Medicare Part D-Obamacare Comparison Is Making Less and Less Sense

With the possible exception of one phrase — “it’s a marathon, not a sprint” — defenders of Obamacare have repeatedly invoked the same warning.

Don’t be too critical of the Affordable Care Act’s new marketplaces. Medicare Part D had a rocky rollout, too.

“In terms of confusion, lack of knowledge, and misinformation, the current situation with exchanges resembles the situation that prevailed when Part D enrollment opened,” Daniel McFadden, a UC-Berkeley economist and Nobel laureate, told the Wall Street Journal‘s David Wessel earlier this month.

Part D, “at the time that it was passed was actually less popular than the Affordable Care Act,” President Obama said in an NPR interview on Oct. 1, the day the new marketplaces launched.

There are similarities between the two programs, from the political fight over their enactment to the difficulties in making the laws a reality. But the laws differ in some important ways, too, including ones that supporters haven’t fully acknowledged.

So what can we take away from Part D? Here is a quick guide to lessons from the drug plan’s rollout.

The political environment

How it’s similar: Just as Democrats fiercely resisted Republicans’ efforts to enact a Medicare drug benefit, the GOP refused to support the Democrat-led ACA.

How it differs: While Part D is seen as successful today — 90% of seniors were satisfied, according to a 2009 survey — Democrats say that their party deserves some credit.

“We lost the policy fight, and what did we do?” asked Rep. Bill Pascrell (D-N.J.), at a hearing on Capitol Hill on Tuesday. “We went back to our districts and we told our seniors although we voted no, we … will work with the Bush administration to make it work,” Pascrell added.

“And how many of you stood up to do that” for the ACA, Pascrell asked his GOP colleagues. “None. Zero. Zero.”

Websites’ difficulties

How they’re similar: Both launches were filled with glitches. The Medicare Prescription Drug Plan finder’s launch in November 2005 was about a month behind schedule, and that website also was slow, missing key information, and took time to fix, notes Georgetown health scholar Jack Hoadley, who has blogged about lessons from Part D’s implementation.

“The level of frustration for those using the site was pretty high in 2005, just like today,” Hoadley told me earlier this month.

How they differ: In many respects, Medicare.gov was less important to Part D than healthcare.gov is to the ACA.

The new insurance exchange websites are seen as a key linchpin of the law; they’re intended to allow millions of Americans to browse different coverage options, see their subsidies and check if their preferred providers are included.

That personalized shopping experience is one reason why the online features are so crucial and call centers aren’t a perfect substitute; as the Huffington Post‘s Jeffrey Young recently reported, the ACA wasn’t really designed for shopping over the phone.

And it’s also a major departure from 2005, when most seniors didn’t turn to the Part D website on their own. Surveys suggested that nine out of 10 seniors went through brokers, family members or other helpers to select their new prescription drug plans, according to one report.

The urgency of the problem

How it’s similar: Both high-profile laws came under widespread scrutiny, with front-page stories and network news reports devoted to their rocky launch.

How it differs: While criticism of Part D did focus on the law’s unexpectedly high cost and troubled launch, there was also a public health component: Seniors were increasingly nervous that they wouldn’t get their drugs.

Current challenges with the ACA, meanwhile, center on the political and policy implications. Many of the nation’s poorest and sickest patients already are being helped by provisions in the law that expand Medicaid and bar insurers from excluding customers based on pre-existing conditions.

How the White House is managing the situation

How it’s similar: Both administrations were forced to scramble to address the dual problem of fixing the program while managing public perception.

How it differs: The Bush administration quickly implemented a policy of “almost over-sharing information,” one former official told me; for example, CMS officials held regular meetings with industry stakeholders throughout the fall and winter of 2005, with daily updates on the state of the Part D rollout.

But the current White House adopted a “bunker mentality” for weeks, David Nather writes at Politico, offering few details over what went wrong and how soon it can be fixed. While officials are now shifting gears and offering more transparency, NBC’s Chuck Todd on MSNBC’s “Morning Joe” on Wednesday morning said that the White House remains hunkered down. The Obama administration is nervous, Todd said, that “their entire second term is going to be judged on the implementation of health care.”

What we still don’t know

By the end of November 2005, about two months after its original scheduled launch, medicare.gov was “well-designed and easy to use,” one New York Times reporter concluded.

Will healthcare.gov follow a similar timetable? Obama administration officials have pledged that the exchange websites will be mostly working by late November, which would still allow for a four-month open enrollment period.

That gets to another interesting comparison: how will sign-ups through the ACA compare to through Part D?

Obama administration officials acknowledge that early enrollment numbers will be low — HHS Secretary Kathleen Sebelius on Wednesday morning told a House committee that the figures will be “very small,” largely because of the exchange website problems.

But Georgetown’s Hoadley notes that the decision to purchase health coverage is a complicated process, pointing to the slow uptake for Part D: about 8 million seniors waited to sign up until after Jan. 1, 2006.

“Modest enrollment numbers in the first month, let alone the first week, mean little as an indicator of eventual success,” Hoadley concludes.

Dan Diamond is Managing Editor of the Daily Briefing, a CaliforniaHealthline columnist, and a Forbes contributor. This post originally appeared in California Healthline.

14 replies »

  1. After 30 years in the employee benefits business I’ve come to the conclusion that we need to switch to a more robust central system. Yes Medicare for all seems like the logical next step. Clearly this system of exchanges either federal or state is a redo of previous failed policies.

    Although it’s always fun to blame the insurance industry I would suggest from years of working with them they are not the bad players here. There are laws and requirements that they follow. When our charges are multiple times what our friends to the north pay or in Europe you have to pause. The true single payer countries like Canada and the UK have some issues with waiting times but not as bad as initially reported. Most of Europe uses insurance carriers which keeps the short fall off of the government books. The insurance carriers negotiate with providers as one. Strength to strength keeps prices inline.

    America’s largest employers are rapidly changing the way they will pay for procedures. Rather then paying in the 90th percentile of usual, customary they essentially willing only to pay the lowest cost in a given area. This will eventually force the cost of care down

  2. You are right: Liberal groups objected to the ad on political grounds. The GAO and the networks (save CBS) found that to be baseless.

    I did not equate the two in any way. I simply noted that, unlike the revisionist thinking, Democrats continued to assail Part D – not only for this ad, but for the non-interference clause (an honest policy dispute, just as there are honest policy disputes in ACA) and various other issues.

    I am not particular hostile to the law itself (though I am hostile to the way it’s been rolled out). I do, however, dispute the idea that Democrats just happily went along with Part D after its passage.They were much friendlier to the program after it came in significantly under budget, lowered hospital and nursing home costs under Medicare, and enjoyed 90% approval ratings among seniors.

  3. Tony – liberal groups objected to the ad not because it was for Medicare Part-D, but because they deemed it essentially a campaign commercial for the Bush admin in the middle of an election. Rather than providing information as a public service, the commercials mostly just touted a hand-out to seniors. In any case, you cannot seriously equate objections to the Part-D as with the all-out assault by Republicans against ACA. There is just no way you can contend that the democrats obstructed, maligned, undermined, and tried to force the repeal of Part-D in the maniacally obsessed way Republicans have gone after ACA. Just stop.

  4. Aaron –

    I worked at HHS when it happened:


    In short, Democrats complained about the ad to GAO. GAO – by law – had to investigate. Once it investigated, CBS used the opportunity to pull the ad at Rep. Emanuel’s request. CBS quickly backtracked when VP Franks’ relationship with Emanuel was disclosed. Also, GAO found no wrongdoing.

    So the source: First-person witness. Secondary source: See New York Times story embedded.

    Thanks for asking.

  5. Tony – oh “that happened”, did it? because you read it on a blog somewhere, or heard some wingnut radio show say so? cite your source. I call BS.

  6. Does that cooperation by Democrats include badgering networks not to accept HHS ads that informed seniors how to sign up for the interim Medicare prescription savings card?

    That happened.

  7. Here is where we have to go – “change or die”

    Here is my grossly overly simplified US “Healthcare Plan”

    – Close 1/3rd of US Hospitals within 5 years. There are too many and too geographically concentrated. Reward efficient ones who don’t horribly gouge/rape the system- Have you checked your hospital bills lately?

    – Every US citizen DESERVES as painfree and as dignified a death as modern medicine has to offer- Have you checked the medical expenditures in the last 6 months of “life”?

    – Strong emphasis on both individual (behavioral change) and institutional (public health) prevention. We need both.

    – Single Payer by 2020 – Medicare, by in large, “works” – Or at least there is the framework for it to work.

  8. “How it’s similar: Just as Democrats fiercely resisted Republicans’ efforts to enact a Medicare drug benefit, the GOP refused to support the Democrat-led ACA.”

    Balderdash! There is no comparison between the Democrats’ “fierce resistance” to Medicare Part D and the Republicans’ refusal to cooperate on ACA. Yes, Democrats were in opposition to many provisions in Part D (most of all, the provision that prohibits the government from negotiating with pharmaceutical companies over prices), but throughout the process they worked with their Republican colleagues to make the best of the program. That cooperation from Democrats on Part D bears no resemblance at all to the all-out war the GOP has waged on ACA (and anything at all) since day 1 of the Obama administration. There has been lass than zero cooperation from Republicans on trying to make ACA work – indeed, they have done everything possible to gut, sabotage, delay, obstruct, and repeal ACA since its inception… which is pretty damn ironic since ACA is basically the Republican plan for healthcare reform! Lest you’ve forgotten already, Republicans shut down the freakin government and threatened to default on our national debt (due in no small part to Medicare Part D and wars put on credit cards) unless ACA was defunded. Did democrats shut down the government because they were opposed to Medicare Part D?

    If the goal of this piece is to dismiss the comparison between Medicare Part D and ACA, then you missed the most glaring difference of all: Part D added hugely to the national debt, as analyses forecasted at the time it was proposed. ACA, meanwhile, is forecast by the CBO to lower the debt by $200 billion over the next 10 years. In that regard, I agree that the Part-D/ACA comparison is not a good one.

  9. I am not resistant. But the roll out is toxic and ill conceived, just as is the computerization of medical care. Then leadership has religious faith in IT and/or has received $ billions in “contributions”.

  10. It’s amazing the outcry over these changes (ultimately for the better) in the US. Every little glitch is met with waves of criticism.

    The fact is that the American health insurance system needed an overhaul. Obamacare is doing what others wouldn’t. There are some teething problems. And many more to come I would expect. But ultimately the revamp that was needed in the industry is finally underway.

    The US is in fact backwards in what private health insurance should offer and how insurers should operate. For too long have consumers accepted being ripped off and think that it is the norm. The norm in the US maybe. But not elsewhere. Now people are resistant to change that benefits all.

  11. The comparison is merely a ruse, a childish reaction to makemthe current fiasco seem like it is the standard for IT fiascos.

    Whtat I do not get is why not compare the current IT fiasco and crashes to the hospital EHR IT systems that crash frequently, cause errors, offer the propensity to misidentification, give error messages, block treatments, provide misinformation, and waste hours of professionals’ time?

  12. “Part D is seen as successful today — 90% of seniors were satisfied, according to a 2009 survey”

    What the hey, if the people who are getting the goodies like it, it must be sucessful. Forget how much it costs, forget that there was no effort made to buy generic or from a formulary – SUCESS!

    Lets start a program that that gives a car and a six pack of beer to teenagers – I’ll bet that more than 90% of teenagers would be satisfied. SUCESS!

    But that ain’t gonna happen – “I’d like to help you son but you’re too young to vote” Eddie Cochran – Summertime Blues

  13. The literal, overly wonky comparison never really made much sense in the first place to anybody outside of policy circles, anyway – Part D was a much, much smaller program …… ACA is huge by comparison. The better comparison is to the original Medicare, which is the only program that even remotely comes close

    On the other hand, IT IS perfectly reasonable to point out that government programs often experience growing pains in their infancy