It's projected to cost $724 billion over the next 10 years. It's expected to enroll nearly 30 million seniors and people with disabilities. It relies on private insurance companies to deliver a big new government benefit. It begins today.
And as experts discuss the new Medicare prescription benefit, one word keeps recurring: experiment.
"It's a fascinating social experiment in using private sector resources to deliver a social benefit," said Dan Mendelson, president of Avalere Health LLC, a Washington consulting firm. "What Congress did was completely unprecedented -- they created new markets and new products."
Even before implementation, the program is under attack from both sides of the political spectrum. Conservatives see it as a "central control" entitlement program, the first step toward price controls on drugs. Liberals see it as turning too many dollars and too much control to profit-hungry companies, the first step toward privatizing other government programs.
Its health impact is uncertain as well. Clearly, some seniors who had no drug coverage will benefit. Others will find that the drugs they've been taking aren't covered or that their coverage has gaps -- including a so-called "doughnut hole" -- leaving them to pay thousands of dollars out of pocket. All of this makes the overall effect on access to medications hard to gauge.
"It's a huge natural experiment," said Stephen Soumerai, a professor at Harvard Medical School. "We're going to have a research agenda for a lifetime."
Among the factors with unknown impacts:
Most enrollees won't get coverage for drug costs between $2,250 and $5,100 a year. This is the doughnut hole, introduced to keep costs down.
Seniors, who are generally not used to managed-care limits on which medications they get, will find particularly aggressive controls in some plans, according to Mendelson. These include efforts to switch patients to less expensive drugs or make them try cheaper pills before the insurer will pay for expensive ones.
Because each private insurer decides which drugs it will cover, some people will find themselves in plans that don't cover the medications they're taking.
For a variety of reasons, many who could benefit from the new plans may not sign up. Also, if only the sickest enroll, premiums are likely to increase steeply.
With the typical senior facing nearly $2,000 a year in drug costs, up from $559 in 1992, there was little dissent that help was needed.
The Bush administration and a narrow majority in each house of Congress pushed through a program they described as a shrewd way to harness the power of the marketplace -- let competing private insurers negotiate prices with drug companies, design their own deductibles and co-payments, and set their own premiums.
It's working, say proponents. As evidence, they point out that the average monthly premium is $32, about $5 lower than predicted, and that many plans offer no deductible or some coverage in the doughnut hole.
"If it was left solely to the devices of the government, that wouldn't have happened," said Michael Freeman, executive vice president of the Healthcare Leadership Council, a group representing executives of health companies ranging from large pharmaceutical manufacturers to nonprofit hospitals.
Moreover, Freeman said, while the government will be paying a lot of pharmacy bills, making medication available should keep seniors healthier, saving other costs. "It's cheaper to pay for a bottle of medicine than for a hospital visit," he said.
Karen Ignagni, president and chief executive of America's Health Insurance Plans, a trade association, said private companies are best equipped to control drug costs. She points to studies showing that techniques such as switching patients to less expensive drugs have lowered costs by 15 percent to 20 percent in the federal employee and Medicaid health programs.
"One of the most important parts of this program is that the private sector is able to leverage tools and techniques that have been driving down the cost of prescriptions," she said.
Critics on the left, however, say that the program omits the most effective way to save money -- using the government's purchasing power.
"If we're really concerned about negotiating the best prices possible, the best way is to buy in bulk for all 43 million beneficiaries," said Judith Stein, director of the Connecticut-based Center for Medicare Advocacy. "Wal-Mart figured that out. Wal-Marts in Baltimore and in Hartford [Conn.] don't negotiate on their own."
Instead, she said, "it's moving Medicare in a more expensive and more privatized direction."