In the latest Weekly Standard, my EPPC colleague Pete Wehner and I have an article examining the success of the Medicare prescription drug benefit to date. As we point out:

Now in its third year, the drug benefit is working better than predicted. More than 1,800 private plans are competing for enrollment. More important, Medicare beneficiaries like the program. Recent independent surveys show 85 percent are satisfied with their coverage. And little wonder: In 2008, the average beneficiary premium is just $25 per month, well below the original estimate of $41.

The program’s competitive design is holding down costs for the government as well. The Centers for Medicare and Medicaid Services announced earlier this year the new drug benefit’s costs will be 40 percent–or $244 billion–less over ten years than originally projected. This is an unprecedented achievement in health care policy.

As we note in the article, the continued success of the drug benefit has important implications for the broader health care debate. Advocates for market-based reforms have long argued that the best way to improve the quality of services provided, and improve efficiency in health care too, is with public policies which promote strong price and quality competition. Now the drug benefit, even at this early stage, is beginning to demonstrate this argument has merit.