The real story behind Medicare Part D claimed cost reductions.  A statement from the Medicare Rights Center:

"By now most people have heard that the Part D benefit has a large gap in coverage that often hits people by surprise when they go to the pharmacy and discover they have to pay 100 percent of the cost of their drugs. During this gap, the insurance companies providing Part D still receive monthly checks from plan members and taxpayers, but those companies pay nothing toward covering the prescription drugs of people with Medicare.

Less well known is that the coverage gap is even wider next year. The Bush administration has bragged to the press that the average Part D premium is going down, but it failed to mention that all other out-of-pocket spending is going up. The amount people will have to spend out of pocket before their Part D coverage starts picking up the tab again will rise from $3,600 in 2006 to $3,850 in 2007 (see chart below to learn how the standard Part D benefit changes in 2007).

Worse, that money will buy fewer medicines in 2007 because Part D fails to rein in drug prices. An AARP study found that prices for the prescription drugs most commonly taken by older Americans rose over 6 percent, more than double the cost of living adjustment in Social Security benefits that kick in on January 1. Earlier research found that Part D plans pass on price hikes by pharmaceutical manufacturers nearly dollar for dollar to plan members."