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Federal subsidy of Part D providers

Several readers have asked why insurance companies are so interested in the Medicare Part D program. While there are several reasons, the most significant one is they are protected from losses for a defined period of time.
Buried within the 2003 Medicare law was a provision that allotted $10 billion to cover potential losses incurred by insurers who provided Medicare Part D drug coverage plans. Yes, there is a time limit for claims against this fund, but it provides insurers with enough time to figure out how to make money and protects them from losses while they are learning.
What a great deal. I wish someone had allocated money to me to help me get my consulting firm started nine years ago; many other businesses could have benefited from Federal and taxpayer largesse as well. But we don’t qualify for these huge subsidies; we have to succeed or fail on our own. The invisible hand has a fistful of cash for selected “entrepreneurs”.
I continue to be mystified by the apparent willingness of the present administration and the conservative Republican majority to try to solve big problems with taxpayer funds. The $10 billion subsidy is a big-government, fiscally “liberal” approach.
What does this mean for you?
Higher taxes to subsidize corporations while they learn from their mistakes.

One thought on “Federal subsidy of Part D providers”

  1. You bitter twisted young man! You should be glorying in your right to pay higher taxes so that impoverished insurance companies and PBMs on the breadline don’t have to put any of their shareholders (or even worse, executives) tiny amounts of capital on the line! After all they deserve a break from the financial traumas they’ve faced over the last few years, and the $10 billion over several years will barely cover Bill McGuire’s salary!

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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