What’s Wrong with the Senate Medicare Drug Bill

The Heritage Foundation ^ | June 18, 2003 | by Robert E. Moffit, Ph.D.

[LuceLu]

For entire article, please link to http://www.heritage.org/Research/HealthCare/wm297.cfm

"Consequences

The Senate bill’s drug provisions will have several consequences.

It will displace existing private-sector drug coverage for millions of seniors. The Congressional Budget Office estimate that 37 percent of retired employees with employer-sponsored coverage would lose it under the bill may yet be a conservative projection. Congress has long been a fruitful source of unintended consequences in federal health policy. Currently, 78 percent of all seniors have drug coverage, mostly through private plans or retiree insurance coverage.[6] As the editorialists of The Washington Post have warned, “Private employers, for their part, might well be prompted to drop the drug coverage they currently offer their retirees.”[7] For those seniors who find themselves with no other alternative but the government plan, the policy result might prove to be more than a mere personal inconvenience.

In creating a new entitlement of unknown cost, it will guarantee that low-income working people pay the drug bills of rich retirees with six-figure incomes. Bill Gates, retired as president of Microsoft, will be subsidized by taxpayers along with the retired librarian. With universal entitlements, the wealthiest are, after all, entitled. In the face of relentlessly growing and massive costs, larger demands on general revenues and taxpayer’s wallets to sustain the Medicare program, this is bad public policy.

The new drug entitlements will dramatically increase the claims processing for the Medicare bureaucracy and its contractors. That will probably be dismissed as a minor administrative burden in a program that is already in managerial meltdown, but the explosion of utilization will engender soaring costs that can and will be controlled only through price controls and a direct or indirect rationing of drugs. It is only a matter of time. In Medicaid, we have a very clear example of what to expect with a government run prescription drug program. [8] What is happening in Medicaid today could very well be the future of drug coverage in Medicare."

[LuceLu]

This pending legislation is of the worst kind. It is scary because it looks like they will agree to pass almost anything to make it seem like the administration is doing "something" about healthcare, especially in light of the 2004 elections. I do not like this one bit.

LuceLu

[Wright is right!]

The situation is the same as it has been in the past on other issues - pass something first, anything at all - and then pledge to fix it later. The fixes are always worse than the bill itself, which was always worse than the problemo it was designed to solve.

Which is why we have such a convoluted system of laws in the first place.

Michael

[Libertarianize the GOP]

http://www.freerepublic.com/perl/bump-list

[Nonstatist]

Another "unintended" consequence is that a lot of free market conservative's enthusiasm for this administration is going to tank, with possible repurcussions on his reelection bid next year. This is a sell out of the worst kind; I doubt a Republican majority and a Dem President would pass this massive redistribution and Gov't nationalization scheme.

[Nonstatist]

the explosion of utilization will engender soaring costs that can and will be controlled only through price controls and a direct or indirect rationing of drugs

Where is the Freeper resistance to this monstrosity? What in the world is the point of having a Republican gov't?

[Jumper]

Health Care and Drugs for Seniors was going to happen; the President gets credit for this just as surely as if the economy went up or down. Bottom line is that we are slowly going to meet the Europeans somewhere in the middle of socialism as they pull back a bit. Then one has to wonder what the differences are between the two systems of America and Europe!

[OREALLY]

Welcome to Free Republic....

[JohnGalt]

The warfare-welfare state rolls on.

Seems there are a few who have still not figured out how they go hand in hand.

[Alberta's Child]

It will displace existing private-sector drug coverage for millions of seniors.

This is not just a "consequence" of this bill, it is the precise aim of it. General Motors, for example, currently has a $1.4 billion liability for future health coverage of its retirees. A government program of this sort is aimed at eliminating that liability for them.

The irony here is that the quality of prescription drugs for the elderly is going to plummet. Grandma won't have much say in the matter when her government-paid Medicare coverage starts prescribing government-paid breath mints to treat her heart problem.

[Ben Bolt]

The last thing our citizens need is another entitlement and many of us conservative folks here cannot seem to impart the downside of this .

Nonetheless keep that chin up & welcome to the jungle ^ )

[Mamzelle]

This will be a shot in the arm, a boondoggle for the pharm industry and pharm stocks.

Atleast for a while.

[Alberta's Child]

This will be a shot in the arm, a boondoggle for the pharm industry and pharm stocks.

I wouldn't count on it. Medicare isn't exactly a "shot in the arm" for doctors these days.

I'm not the kind of person who buys into conspiracy theories, but I am getting more convinced by the day that this country is going to solve its Social Security problem by killing off our retirees. Not in a messy manner, of course -- but by doing things like prescribing Tic-Tacs to treat life-threatening illnesses.

[Mamzelle]

"At least for a while"--

There'll be increased purchases of medications. Retirees get the most dependable medical care, at least at the moment.

Considering all the incredible stresses on health insurance, I can't get too excited about one more entitlement program. It all has to fall apart, soon, anyway.

[Alberta's Child]

You're right about the increased purchases of medication. I just don't know how much that will mean if these purchases are done at below-market prices.

[Mamzelle]

It works for Canada.

Hey, I'm unhappy about this budget-buster, too. But there are so many things out there that will devastate the middle-income patient--this is just one. Critical mass, then meltdown.

[Jesse]

"Where is the Freeper resistance to this monstrosity? What in the world is the point of having a Republican gov't?"

Our team is in power. They can subsidize welfare farming with the stroke of a pen, enact the biggest socialist wealth transfer since LBJ's Great Society, and create huge new federal bureaucracies to usurp local control of education. Dontcha know...Bush can do no wrong. He's compassionate.

Might as well start calling this FreeLoaderRepublic, in honor of all the posters who support these leftist policies conceived and enacted by "Republicans".

[Nonstatist]

Bush and Rowe will rue the day. The minute the economy really goes South, they will find themselves with no base of support. Just like his old man. The apple doesent fall far, does it?

[Alberta's Child]

It works for Canada because a drug company can offset the below-market prices at which it sells in Canada with above-market prices in the U.S. If everyone is paying below-market prices, then drug companies are going to stop selling their products.

[Mamzelle]

Eventually, but not immediately. Perhaps this will function as de facto rationing?

[Alberta's Child]

Perhaps this will function as de facto rationing?

Absolutely. Medicare effectively "rations" care by reducing the amount they will pay for medical treatments. As a result, doctors stop treating Medicare patients and they eventually either pay their own way or visit a medicine man instead of a doctor.