The New Medicare Program: A Prescription for Disaster

Capitalism Magazine ^ | 11-19-03 | Richard E. Ralston

[Straight Vermonter]

At a cost of $400 billion over 10 years, Congressional Republicans have agreed in Conference Committee—with the enthusiastic encouragement of a Republican President—to the greatest expansion of government in two generations. This new Medicare program can only result in what government supplied health care has always produced in the U.S. and elsewhere: fewer new drugs and a lot more government. Of course, after a few years in practice we all know the program will end up costing a lot more.

The stated reason for the plan is to provide Americans with medicines they could not otherwise afford. The Republicans don't ask why drugs are out of the reach of so many customers. Nor do they ask how those who cannot afford their own drugs will now be able to pay through new premiums for everyone else's drugs.

Higher costs will be the result of enacting these prescription drug plans, based on the established track record of government involvement with health care. Medicare, which cost $3 billion a year in 1967 costs $250 billion today and, according to the Congressional Budget Office, will cost $474 billion a year by 2012 without any new prescription benefits. The idea that government involvement will reduce the cost of the development of anything as complicated and high-tech as life-saving drugs is ludicrous: The government, as Americans well know, cannot even control the cost of postage.

Rather than reduce the cost of drugs, like all government medical plans the new program will just add more of the poison that created the disease. Rigid controls and the vast bureaucracies of Medicare and the FDA already add billions of dollars to the cost of drugs. This, not the market place, is responsible for the current high cost of drugs. New government programs and "benefits" will further explode drug costs and result in rationing, restrictions, regulations, less research, and fewer drugs. Adding yet more federal bureaucracy to administer another program will just layer on more expense.

Fewer new drugs will become available as a consequence of these plans. When the government is "surprised" after the escalation in drug costs that result from a plan that promises to pay all of the bills, it will inevitably proceed to price controls and other new restrictions on drug companies

How do these Republican advocates of less government and free markets justify this huge new program? The woefully inadequate fig leaf they provide is the introduction of competition to Medicare from private insurance companies. However such competition will be available temporarily in only six cities during a six year test period beginning seven years from now (2010). What a triumph for Capitalism! Yet Senator Edward Kennedy says it will destroy Medicare. Yea. Sure.

There is one minor feature of the bill that would help seniors pay for their prescriptions. It would allow Americans to contribute to tax free Health Savings Accounts in conjunction with the purchase of high deductible health insurance policies. But this single feature is not nearly enough to make the legislation palatable.

If the government really cares about the availability of medicine, it can start decreasing rather than increasing controls over the pharmaceutical industry. What the government really needs to expand is not government, but freedom: a free market that encourages drug companies to develop plenty of new drugs to compete with the old. Free markets—including such features as Health Savings Accounts—would provide patients and physicians with better drugs at a more reasonable cost than the heavy hand of government.

Americans concerned about the cost of their drugs and their own health need to reject this crude attempt to bribe them with their own money.

[Straight Vermonter]

[Alain2112]

Amen! This bill needs to be defeated, ASAP.

[FirstPrinciple]

Forget the Democrats. Every Republican Congressman/Senator must read this before they vote on this bill.

[Jumper]

The Prescription Drug Program is actually a component of Economic Competition in World Markets. Americans need to understand that all our WTO training partners already have a economic advantage built in from Government provided health care. This American Initiative is the smallest and most economically feasible approach to saving US Corporations money which will make their products more competitive in World Markets. The fact that tax payers will pay this and the Government will have expenditures does not necessiarly mean that the USA will go to total health care provided by the Government as in Europe, South Korea, and elsewhere.... Leveling the playing field will also place more pressure on European governments to recognize that they too need to revamp their economies. If the US were to realign her economy with those of Europe for reasons of health care and economic compeitition, we will attain a further erosion of opinion from the Europeans who would lose their "Liberal/Socialist" component for disliking America and then we would probably see their economies collaspe from the level compeition - and we would follow them in 10-25 years. This plan is the best dollar cost averaged deal to alliveate the unfair advantage provided by European Health Care (and other WTO members) by cutting just a segment of high expense cost from Employers' bottom line.

[meenie]

Your comment makes sense if Europe was our main competitor. China is our main competitor. Should we be leveling the playing field by subsidizing salaries that employers pay their workers? Is there a limit to what our Federal deficits can become before it destroys our economy and nation?

At what point does a republic cease being a force for the people it represents and become a fascist enterprise for the good of the corporations it controls? These are questions that should be answered before we involve ourselves in any other ventures promoted in the name of electing our President.

[RJCogburn]

Congressional Republicans have agreed in Conference Committee—with the enthusiastic encouragement of a Republican President—to the greatest expansion of government in two generations

I do not believe that I shall vote for Bush again.....Hillary running an exception.

[petercooper]

let this bill die!

[Neenah]

I am BUMPING THIS....please if you read this..bump it again. This effects EVERYONE, and is a little more important than Jacko or Peterson.

I find it very strange that the media is not screaming this. What is going on ?

Thanks for pinging.

[RJCogburn]

Happy to bump, Neenah.

Other than craven political considerations, there is no justification for this.