When the 2003 MMA bill was passed in the middle of the night, there were so many interests beng paid off that it was hard to keep straight. Of course there were the pharma companies who got a new market, with no price controls; the PBMs who got a bunch more customers in the  new standalone Particpating Drug Plans; the health insurers who not only got the PDP customers (and a guarantee against losses in those plans) but also got a huge bump in the payments for Medicare Advantage, the private HMO version of Medicare which has been costing the taxpayer extra money for a long time. And then the hospitals (and sort of the doctors too) got an increase in their Medicare payment rates to keep them quiet as well.

The only people getting screwed were the taxpayer, and the seniors who could have had a better drug coverage prorgram for much less money. But there's one more group that did OK too out of the program. 

Employers who currently offered drug coverage were offered a big subsidy to not abandon that program and turf those retirees into Medicare Part D. The NY Times today digs up a Wall Street investment bank report on the subject. The bankers think this is great, as the extra cash that the government is pouring in to stop the employers dropping their programs goes straight to the bottom line.

As you might expect the company with the most retirees in the richest benefit package is GM, and it will get $1bn over 4 years.  But the total payout is around $4billion over the next four years. But wait there's more!

The Credit Suisse analysts found that the big companies, over the life of their retiree health plans, expected to receive about $25 billion from the federal subsidy arrangement.

But Mr. Hamelburg of the federal Centers for Medicare and Medicaid Services said that companies' estimates did not capture the entire outlay expected because they did not include the substantial subsidies that would go to state and local governments that run retiree health plans. The government expects to pay all employers, private and public, about $14 billion over the next four years.

Now the upshot is that the retirees keep their better than Part D plans and the taxpayer doesn't pay quite as much as if all the corporations' retirees were dumped into Part D. But what a mess of a system!

The problem is that to run an equitable and efficient insurance system, you need to get all the people and all the dollars in one large pool. Medicare Part D is a futile attempt to keep separate pools and separate dollar streams, which will inevitably cost more and provide less than doing it right in the first place.

I would write more about why the pooling issue is so important, but I just did that over at Spot-on.