Emergency Action Alert--Stop biggest expansion of govt. (Medicare drug plan) since LBJ

The die has been cast. The Republican Party, once the party of limited government and lower taxes, has decided overwhelmingly to cast its lot with the largest expansion of the federal government since Lyndon Baines Johnson.

I have spoken with leading anti-tax officials in Washington, D.C. and they tell me we have only a 10 percent chance of stopping this Medicare prescription drug boondoggle. I would urge you to call California Sen. Dianne Feinstein, Louisiana Sen. John Breaux, the Republican leadership in the Senate (Sen. Bill Frist) (toll-free number to the Capitol switchboard is 800-648-3516 or 202-224-3121) and MORE THAN ANYTHING to inundate the White House with calls to defeat the GOP Medicare prescription drug plan. You can call the White House (202-456-1111 and press "1" twice to get a comment line operator), call talk radio shows, forward this email to others, post it on the Free Republic website and do anything else you can. No bill is better than this bill. The House has already passed the measure; it is before the Senate; and sadly, I believe President Bush will sign it without a tidal wave of opposition.

There are many superb things that President Bush and the GOP Congress have done -- fighting the war on terror, the president's tax cuts, nominating and confirming many excellent judicial nominations. But the GOP (once the party of fiscal conservatism) has presided over the largest federal government expansion in the last past half-century.

As the Heritage Foundation notes, "The federal government will spend $21,000 per household in 2003, up from $16,000 in 1999. Adjusting for inflation, this amounts to the largest four-year expansion of government in more than 50 years. Not since World War II has Washington spent more per household than now." Please don't console yourself by believing that most of this increase has gone to the war on terrorism; it hasn't, but to bloated education and farm bills, and others.

Let the words of former House Majority Leader Dick Armey resonate: "This bill will add at least $400 billion in deficits over the coming decade. Worse, (the) AARP and others have made it quite clear that they see this bill as just the opening gambit. They will be back, year after year, petitioning Congress to massively expand this already oversized new entitlement. Hillary Clinton's wish for ever-increasing government control over the American health care system will come true" (AND BE DONE BY REPUBLICANS). The last five words are my words insert.

In conclusion, let me share this paragraph from the lead editorial in Thursday's Wall Street Journal entitled "Entitlements are Forever":

"As Congressmen are by now well aware, 75% of Medicare beneficiaries already have some kind of drug coverage. That's why they have devoted about a fifth of the resources in their bill toward bribing employers not to drop the benefit. An estimate from the National Center for Policy Analysis suggests that only one of every 16 dollars spent in this bill would go toward purchasing drugs seniors otherwise would not have had. The rest simply displaces spending by the private sector and state Medicaid programs. We wonder how many seniors will thank Republicans when they learn that their new Medicare benefit is worse than their current one.

By the way, a recent survey of seniors (conducted by Basswood Research) shows that 81 percent of seniors are "satisified" with their current drug coverage. I have no problem with a small effort, such as a senior drug discount card or low-income subsidy. I cannot and I will not support this bill, the largest expansion of the federal government since LBJ. Please join me in registering your strong and vocal opposition.

The GOP's free-market Medicare reformers are wondering what to make of their leadership's deal on a prescription drug benefit. Let us suggest one way of looking at it: as an awfully high price to pay for expanded Health Savings Accounts.

Try as we might, we just don't see much else besides HSAs to be enthusiastic about in the 10-year "$400 billion" (yeah, right) package heading for votes shortly in the House and Senate. True, conservatives can claim some symbolic victories on means testing and deductibles, which Newt Gingrich stretches into epic virtues nearby. But the bottom line is that the bill would add a universal drug entitlement to a largely unreformed Medicare program.

That's the same Medicare program the White House Office of Management and Budget labeled "the real fiscal danger" in a report earlier this year, noting that it is expected to spend $13 trillion more in current dollars over the next 75 years than its payroll tax and premiums will take in. OMB estimated that adding a drug benefit would worsen that picture by something like $7 trillion.

Ever since the bipartisan Medicare commission of the late 1990s, every serious person in Washington has understood that the least painful way to address this looming problem is to move Medicare toward a premium-support model. Seniors would apply a government contribution to the purchase of different insurance policies offered by the private market. Yes, they would be asked to share some of the cost of their coverage choices. But they would be assured access to benefit packages (including prescription drugs, and who knows what future innovations) that evolve naturally in response to market demand, not once-in-a-generation political brawls. American medicine would in turn be progressively freed from the destructive shackles of federal price controls.

But as this year's Medicare debate wore on, our courageous leaders shrank from asking grandparents to make the trade-offs the rest of us do. Out first went President Bush's idea of tying the drug benefit to participation in a private Medicare plan. Out next went Ways and Means Chairman Bill Thomas's modest proposal to ask seniors remaining in traditional Medicare to pay a little extra if it costs more.

Instead of nationwide price competition between government and private plans beginning in 2010, as envisioned in the House version of the Medicare bill, the conference deal envisions it as a time-limited "demonstration" in at most six metropolitan areas. The history of political interference with similar experiments offers little hope of success.

Nor should House conservatives be fooled by the addition of a phony cost-containment "trigger," which would require an unspecified "Congressional response" once general revenues (i.e., revenues beyond the payroll tax) account for 45% of program spending. Let us try to get the logic of this one straight: Representatives are supposed to feel better about voting for this bill because it acknowledges they're passing the buck to a future Congress?

The authors of this drug bill do deserve credit for proposals that promise, in the short run at least, to substantially strengthen the role of private insurers in Medicare. Medicare Plus Choice (M+C), the current HMO option, is slated for a much-needed cash infusion. A new program would open the door for preferred-provider networks--the less restrictive doctor networks that now cover many working Americans--to participate in Medicare. The number of such providers is not limited (as in earlier drafts), and the conference agreement appears to guarantee plan payment at least equal to the cost of traditional Medicare.

All in all, Medicare Administrator Tom Scully tells us he expects that 35% of Medicare beneficiaries would enroll in private plans within a few years of the program's implementation. He may be right, and we hope he is. The experience of M+C shows that private plans can offer attractive benefit packages when adequately funded, and that beneficiaries will enroll. But the Congressional Budget Office estimates a much lower take-up rate, in part because the drug benefit would no longer be a unique selling point of the private plans. The experience of Medicare Plus Choice also shows that the fate of private plans is at the mercy of regulatory and funding decisions. Since peaking at 16.1% of the Medicare population in 1999, M+C enrollment has dropped to 11.7% as Congress squeezed funding and providers dropped out. The private plans created by this new bill could likewise end up being strangled--either by a penny-wise, pound-foolish GOP Congress facing large future budget deficits due to runaway Medicare spending, or by a Democratic Administration ideologically intent on killing them.

Do Republicans really want to gamble on committing the country to an unending drug entitlement in the hopes they'll control Washington long enough to midwife these private plans into the foundation for future reforms? Especially when that entitlement doesn't meet a pressing need?

As Congressmen are by now well aware, 75% of Medicare beneficiaries already have some kind of drug coverage. That's why they have devoted about a fifth of the resources in their bill toward bribing employers not to drop the benefit. An estimate from the National Center for Policy Analysis suggests that only one of every 16 dollars spent in this bill would go toward purchasing drugs seniors otherwise would not have had. The rest simply displaces spending by the private sector and state Medicaid programs. We wonder how many seniors will thank Republicans when they learn that their new Medicare benefit is worse than their current one.

Reluctant Congressmen also needn't be swayed by White House arguments that this bill is their only chance to do something before November 2004. They could easily regroup to pass a low-income subsidy, drug discount card and Medicare Plus Choice stabilization. If polls indicating senior unhappiness with the proposed drug benefit are accurate, that may in fact be the politically savvy thing to do.

We recognize that the U.S. is in a political race on health care, between liberal Democrats who want to socialize the system in stages and those of us who want to introduce market forces and more individual choice. One test of any specific proposal, therefore, is whether it moves in the market direction.

We had hopes that a GOP Medicare reform might do so, but this bill's fine print reveals that short-term politics has overwhelmed the policy. Republicans are offering the certainty of trillions in new entitlements in return for the mere promise of future reform, and that's too expensive a gamble for principled conservatives to support.

Rep. Mike Pence the second term Indiana Republican who is heroically leading a band of conservatives in the House against the $400 billion Medicare prescription drug bill, notes that it was exactly 10 years ago this week that the Hillary Health Care Plan was revealed to the world in all its splendor and glory. When it was first unveiled, Hillary-care was widely hailed as the silver bullet to solve all our health care system woes. The plan was quickly endorsed by the American Association of Retired Persons (AARP).

Six months later the Clinton health plan was the butt of late night talk show jokes as it lay political tatters after being universally rejected by voters. Voters turned down the socialized medicine scheme because of its complexity, high cost, and over-reliance on big government.

Now we have Republicans on the verge of repeating this fiasco, as they offer a prescription drug benefit plan that is complex, costly, reliant on big government, and enthusiastically supported by the AARP. What’s wrong with this picture?

The policy deficiencies of the prescription drug bill are by now well documented. The plan will dump roughly $2 trillion in added unfunded entitlement liabilities into the laps of our children and grandchildren on top of the $21 trillion in unfunded debt already baked in the cake. As Rep. Pence stated on the House floor a few days ago, “Our children will never forgive us for this act of financial malpractice.”

The plan could lead to as many as 4 million seniors to lose their private-employer drug coverage to be thrust unwillingly into a Medicare program that offers worse benefits than they already have. This, of course,is precisely why corporate America has so energetically embraced the plan and is spending millions of dollars in advertisements to sell the public on its virtues. This plan could lead to billions of dollars in liabilities to be erased from the balance sheets of Fortune 500 companies and then shifted onto the books of Uncle Sam. There are no real cost containment features to the bill, and as Rep. Pat Toomey of Pennsylvania intimates, “almost no one in Congress really believes this plan has any chance of holding costs to anywhere near $400 billion.”

None of these fiscal realities seem to matter much to the White House or the congressional Republican leadership, which as we speak are dangling pork barrel goodies in front of the noses of conservative health care skeptics in the House to buy their acquiessence. None of this matters because Republican political strategists are convinced that this bill will earn Bush the gratitude of senior citizen voters, who will flock into the Republican column in November 2004.

This is a potentially tragic political miscalculation on the part of the GOP deep thinkers. In fact, the Medicare prescription drug bill could have just the opposite electoral effect: it could easily so antagonize legions of seniors that it could bring to an end the Republican majority in the House in 2004.

As evidence of the political unpopularity of the drug bill consider the poll results released this week by the Club for Growth. The poll of 800 seniors finds that any support that retirees have for this bill transforms into hostility when those over the age of 65 are told the full details of what this bill would actually provide. For example, when seniors are told that as many as one-in-three of them “may lose” their private drug coverage, 71% of seniors say they disapprove of the bill. When seniors are told that they will have to pay premiums of roughly $500 to $600 a year, 72% say they oppose the bill.

As the researchers at Basswood Research, which conducted the poll, conclude: “the more seniors learn about the prescription drug bill, the less they like it.” Only 19% of seniors support the bill when they are informed of the full costs and the full risks. Republicans are especially vulnerable to retribution by seniors if employers accelerate the trend already in motion of firms discontinuing the prescription drug packages in their health care plans. This may infuriate retirees, because the poll finds that 81% of them with private coverage are satisfied with that plan. These seniors are going to be as livid as late arrivers at the weekly Church bingo game, who can’t find a parking space.

The prescription drug bill is based on a faulty premise: that seniors want to swallow the pill that the Republicans are offering. That is perhaps the biggest myth in American politics today. It’s a myth that could create a Speaker Nancy Pelossi scenario in the House in 2004.

On the other hand, these poll results provide kernels of good news. If Republicans come to their senses and vote down this colossally expensive new entitlement program and replace it with a scaled back plan that just gives benefits to low-income seniors without existing coverage, they will not only be saving their children a king’s ransom, they may be saving their own political hides to boot. And we know that this latter concern trumps every other consideration for our elected officials in Washington or we wouldn’t be having this debate at all.

The bill returns competitive forces to healthcare in our nation.

Under Clinton Admin momentum, the health care system of our nation has been converted to a socialistic one.

Hospitals in most major metropolitan areas receive the lionshare of funding under "risk pools" which make massive allocations of tax payer dollars to hospitals. These allocations have little to do with services because the payments do not correlate to amount of service rendered.

This new legislation specifically creates "FEE FOR SERVICE" models where the physician and hospital are paid ONLY when services are rendered.

In our county nearly 99% of current Medi-Care/Caid funding is tunneled through liberal hospitals (some lead by execs who publicly profess commitment to socialistic models).

These hospitals then dump the funds to foreign bank accounts.

Meanwhile, the primary care physician site only receives about 1% of the total premium paid by the fed to states.

The bill returns competitive forces to healthcare in our nation.

Granted. But it still leaves the taxpayers to fund it. When the government purchases goods & services, private entities will reduce rates to obtain the business - guaranteed customers/profits on the voulume of business. But the companies shift costs to their remaining customers. The medical practices basically have a medicaid/medicare rate, a state-insurance rate, and uninsured rate, an insured rate, and a rate for cash services. Our taxes pay for the 1st two, the second pair are still paid by us in the form of higher premiums and charges, and cash customers are almost non-existant. Even then, low-income recipients of services can usually have their charges reduced or wiped out by simply placing a phone call - it happened at my wife's office for years, and our local hospital has an entire office devoted to such. The practices have to make that lost revenue up somewhere.

This new legislation specifically creates "FEE FOR SERVICE" models where the physician and hospital are paid ONLY when services are rendered.

A step in the right direction. Just as Medical Savings Accounts are a step, but only add to the bureacracy..

Meanwhile, the primary care physician site only receives about 1% of the total premium paid by the fed to states.

If that happended in a third-world country, we'd go ballistic. Just more proof that the government should remain out of the medical field, and end the socialist program altogether.

Americans will be waiting in line behind them in the ERs. The illegals get everything for free.

(snicker)...I've already realized that if you whine and complain about the ER waitime in broken English...you have a better chance to get pushed up in line. It happened to my wife last week. A woman speaking spanglish was carrying on and on and on...and not 5 minutes after...got called in. My wife is pregnant and was having severe abdominal pains. (she and baby are fine now but thats not the point) You'd think a pregnant woman would get top priority at an ER...no matter...after a 3 hour wait, we went to different hospital where speaking broken English was not a prerequiste to get looked at. I guess this is what we have to look forward to unless you live in an area where the majority of people do not depend on the welfare state, don't speak spanish, and don't expect the silver spoon because of their "minority" status.

Hearing you lecture me about physician fees is funny. You haven't a clue how the medical billing systems work and have failed to disclose how HMO plans reimburse contracted physicians.

PPO, POS, and HMO plans are handled in totally separate fashion.

The reform contained in this bill reinforces fee-for-service systems where physicians and hospitals get paid for delivering care, not for political shenanigans that busts-out on medical networks.

HMO networks are the cause of the problem. Privatization of medi-care will NOT resolve the problem because legislation is needed to bans the transfer of financial risk from insurers to physicians.

HMO's function on false pretenses that do not reflect economic realities nor on medical reality.

But, if you are so committed to HMO's and privatization, I suggest that you tell that the families in our practice who have suffered from delays and injuries CREATED BY the delays of the HMO medical groups in this area.

Hearing you lecture me about physician fees is funny. You haven't a clue how the medical billing systems work and have failed to disclose how HMO plans reimburse contracted physicians.

If you think I'm LECTURING you, then you're sadly mistaken. I certainly know how medical billing works, my wife worked for a family practice, I know the doctors well, and have discussed this exact issue. We also work with the local hospital, and was there just last week discussing this issue again. Participating HMO physicians are paid a monthly fee based on the number of members selecting them as their primary care provider. If the doctor/facility can reduce expenses they can increase profits, some plans pay bonuses to providers based on their not exceeding a cost threshold.

But I'm not arguing for HMO's, PPO's or any other plan - privatization is great - get the government out of insurance period.

OK... somehow you've left out the fact that HMO's send a cap check to the hospital for each patient being cared for by the medical group.

So, basically, the hospital gets paid for rendering no service and the medical group gets paid when rendering no service.

Your analysis is flawed because you are not privy to the cap rates paid to physician offices under medicare HMO plans.

These plans send only $5.00 per month to most physicians.

You can't render ANY care at that rate.

Your analysis is flawed because you are not privy to the cap rates paid to physician offices under medicare HMO plans.

If you'll go back through all my posts on this subject, the one constant is that I advocate that the government leave this issue to the citizens, not that I support HMO's or any other plan with government funding.

These plans send only $5.00 per month to most physicians.

Why were HMO's, PPO's formed in the first place? To offer a low cost alternative. With that low-cost is low service.

Sir,

The appearance of HMO's correlates to the appearance of Hillary Clinton and her healthcare agenda.

HMO's are NOT a cost cutting technique. That was only the PR rationale.

IMHO, HMO's were created to:
1. Socialize healthcare
2. Corrale medical information into massive databases for data mining
3. Redlining of particular communities (ethnic or religious) to kill growth there
4. Greed- shift healthcare dollars out of the nation into off shore bank accounts

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