THE MEDICARE DRUG BILL: An Impending Disaster For All Americans

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With the support of the Bush Administration, or at least with the White House’s passive acquiesce, Congress appears on course to enacting a huge new entitlement aimed at middle-income Americans. President Bush likely will sign whatever bill emerges. And as President Clinton’s Medicare administrator puts it “In signing it, as he will surely be forced to do, he will preside over the biggest expansion of government health benefits since the Great Society.”

The legislation makes a mockery of sensible budget control or prudent reform. Rather than combining steps to help some seniors with reforms to the unsustainable finances of the Medicare program, Congress’ “reforms” will reduce choice and innovation and impose staggering financial burdens on our children and grandchildren.

No Fixed Budget = Massive Tax Burdens
Congressional proponents of the legislation maintain that the new drug benefit will cost $400 billion over the next 10 years. This of course is merely a guess. Since the program is an entitlement there is no fixed budget. Moreover, the evidence from both the private and public sectors in recent years suggests that future costs are likely to exceed projections. But even if they are accurate it is not the next 10 years that matter. It is the years after that when the full force of the Baby Boom generation hits Medicare and Social Security. Within 15 years Medicare already faces a Niagara Falls of red ink. Adding a drug benefit without serious reforms and constraints on future spending means massive tax burdens on generation to come.

The bill is needed, say leaders of both parties, to help seniors who face heavy prescription drug costs. To be sure, many lower-income elderly do need help. But today about three-quarters of all seniors already have private insurance against onerous costs, and the pricing of that insurance does force seniors to strike a prudent balance between desire and cost.

Unconscionable Approach
It makes sense for our society to provide assistance targeted toward those who still face heavy burdens, chiefly because of their income. But Congress’ approach would institute a government-sponsored drug program for all Medicare recipients, not just those who need help. For several reasons that approach is unconscionable.

First, there will be powerful incentives for current and future middle-income seniors to forego private insurance protection at realistic prices in favor of government-sponsored drug coverage at subsidized prices. Moreover, corporations and other entities facing high retiree health benefits will soon find creative ways to shift retire drug costs to the taxpayer. The result: taxpayer costs will rise further.

Second, proponents are naïve when they claim that seniors will have many choices of coverage under the legislation – private plans as well as traditional Medicare benefits. Hard lessons from the past, combined with likely design requirements in the final bill, suggest that few private plans will join the program. Mass withdrawals of plans from the existing Medicare+Choice program show what happens when Congress imposes regulations and controls in an effort to cut costs. And in an effort to curb a surge in spending, the government will no doubt gradually tighten regulations on any private plans that do join the drug program, leading to fewer and fewer private plans. It remains to be seen how seniors will respond to this. But when Congress last tried to provide a drug benefit that jeopardized coverage many seniors already had – in 1988 – the backlash was so severe that Congress repealed the legislation within a few months.

Third, despite claims that the new program is modeled after Congress’ own health program, which includes drug coverage, nothing could be further from the truth. The Federal Employees Health Benefits Program (FEHBP) is open to virtually any private plan or insurer meeting some basic benefit requirements and consumer protections. Premiums for these plans vary and reflect the benefits included in the plans, and federal workers choose from among many competing plans.

No Serious Reforms, Fuels Taxpayer Costs
By contrast, Congress will determine the benefits in the legislation moving through Congress, and the government will decide how many of the lowest bidding preferred provider plans will be permitted to offer coverage to seniors in any area. Moreover, because Congress would take a prominent role in influencing prices and benefits – unlike in the FEHBP – the political dynamics would work in the same way as they do today in Medicare. Politicians would be under relentless pressure to keep prices down for their constituents, while drug companies, doctors and seniors would press for ever-more generous coverage. The result: larger and larger subsidies and costs to future generations. Thus not only does the legislation contain no serious reforms to control costs without undermining quality, it actually fuels taxpayer costs.

President Bush and congressional leaders had an opportunity to combine help for some Americans in genuine need with sensible reforms so that our children and grandchildren might look forward to an affordable and high-quality Medicare program. With the looming political and financial juggernaut of the Baby Boom generation approaching retirement, this legislation probably is the last opportunity for hard decisions. But rather that taking a firm leadership role in the legislative process, President Bush elected instead to send Congress a framework and then invited lawmakers to fill in the details. The result was predictable. The process is fast becoming a political feeding frenzy, in which short-term partisan advantage trumps responsible action. While today’s politicians may reap the benefits, it is future generations who will have to pay for this unforgivable failure of leadership.
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"Republicans and Democrats have distracted us with unending battles between haves and have-nots for decades. Over the same period, they have bankrupted the country,"
Source

Senate Panel Adds Drug Benefits in Medicare Overhaul - June 13, 2003
"An influential Senate committee tonight approved the biggest expansion of Medicare in its 38-year history, with an overwhelming bipartisan vote to add prescription drug benefits....The bill would increase federal spending by $400 billion.."

Is the Tax Cut for Real?
"The Bush administration inherited a federal budget of $1.86 trillion, and now proposes to spend $2.3 trillion in 2004, for a whopping 23.6 percent increase in federal spending in this short period. The Bush presidency has far outspent Clinton's in every category. As Cato's Chris Edwards says, "[B]ased on his first three budgets, President Bush is the biggest spending president in decades." To close the gap between spending and revenue, said a report commissioned by the US Treasury, would require an "immediate and permanent 66 percent across-the-board income tax increase."

"George W. Bush is the 43rd President of the United States. Formerly the 46th Governor of the State of Texas, President Bush has earned a reputation as a compassionate conservative who shapes policy based on the principles of limited government,..."

Honey, don't you think
it's great how President Bush
and Congress have spending and fiscal
responsibility under control. Yes, did you see
Laura kiss the President today?

Medicare Should Be Scrapped, Eventually

Worldnetdaily
By Jon Dougherty
October 16, 2000
Source

As the Nov. 7 election nears, senior citizens have been treated to a host of Medicare-funded prescription drug plans offered by the candidates of both major political parties.

I have a better idea. Instead of adding another huge, expensive, inefficient and burdensome layer of bureaucracy to the bloated Medicare program, let's just scrap it instead and begin to teach Americans once more how to be self-sufficient and plan for their own retirement.

Crazy? Politically, perhaps, but that's the problem with Medicare in the first place, isn't it? It's too damned political. As long as it stays that way -- which will be forever -- then the program will remain broken, expensive and inefficient.

Think not? Well, consider that Medicare has been a government-run program from the outset. Through the years, has it become better or worse at delivering on its original promise of unfettered, universal health-care coverage for senior citizens?

I dare say if it was getting better, both major party candidates wouldn't be spending so much time in Florida and elsewhere, trying to explain a new drug benefit package that is simply going to be too expensive on our youth and younger workers in just a few years.

It's free market "cause-and-effect," much like the government's guarantee for student loans. Prices for colleges skyrocketed when politicians began "guaranteeing" loans for college-bound Americans -- as if every American really does "deserve" to go to college or is suited for college.

Speaking of medical care, the "guaranteed payment" principle once applied to hospitals and insurance companies. At one time, patients with any kind of insurance were often admitted to hospitals for dubious and inappropriate conditions. Many didn't require hospitalization, but doctors admitted those patients anyway because they knew insurance companies would simply write a check for the bill. The result? Escalating medical costs and draconian insurance "reform" measures in the mold of problematic HMOs.

Voters should not allow lawmakers to foist yet another burdensome layer of Medicare bureaucracy on our children, grandchildren, and great-grandchildren. They won't be able to afford it.

Granting more "subsidies for initial levels of drug spending will only increase incentives to over-use Medicare benefits and increase the cost of prescription drugs," wrote Tom Miller, director of health policy studies at the Cato Institute, on July 17, in discussing the House Republicans' prescription drug plan.

He's right. Medicare is incapable of being "fixed" as it is. Enlarging it will only make it worse -- and more expensive -- which will eventually cause Uncle Sam to cut it back again, just to "save money." It's a vicious circle, and it's getting us nowhere except further in debt and more reliant on Washington's "generosity." To hell with that.

Medicare was a bad mistake. We can repeat it -- over and over -- or we can scrap a program whose time never came.

Hang this on your walls:

"The seniors have demanded that any health care coverage they choose provide for some sort of prescription drugs benefit package," said House Majority Leader Tom DeLay, Texas Republican.

GOP Embraces Plan For Drug Entitlement

The Washington Times
By Stephen Dinan
June 13, 2003
Source

Republicans have come a long way from the mid-1990s, when then-House Speaker Newt Gingrich predicted Medicare's bureaucracy would "wither on the vine" and Senate Majority Leader Bob Dole said he was proud to have voted against creating the program.

Now most Republicans in both the House and Senate are backing a new entitlement to prescription drugs as part of a $400 billion, 10-year overhaul of Medicare.

"It's just a huge, huge, huge new entitlement program in my view, and that's not what we as Republicans should be doing," said Arizona Rep. Jeff Flake, who voted against the 2002 House Republican version and said he doesn't think he will support this year's plan either.

The Senate Finance Committee passed its version of the overhaul last night, 16-5, with two conservative Republicans joining three Democrats in opposing it. Meanwhile, House Republicans announced their own proposal yesterday that they said combines reform with a new drug benefit.

The bills vary in their details, but both would cover a portion of seniors' prescription drug costs whether they choose to stay in traditional Medicare or move to a managed care option.

Republican leaders say their embrace of prescription drugs is not so much a change in philosophy as it is a marriage of the possible and the necessary.

"The seniors have demanded that any health care coverage they choose provide for some sort of prescription drugs benefit package," said House Majority Leader Tom DeLay, Texas Republican.

"What I view it as is we are headed for a train wreck, and we are trying to anticipate that train wreck and still provide the kind of health care our senior citizens deserve and are calling for," he said, adding that Republicans' proposal will encourage competition, which should bring down drug costs.

Rep. Billy Tauzin, Louisiana Republican and chairman of the Energy and Commerce Committee, which is writing part of the House bill, said Republicans had deep concerns over the fiscal condition of Medicare, but have always agreed that a drug program had to be done. He said now is the time.

"The term paper is due tomorrow," he said. "We've got to get whatever reforms we can get because seniors can't wait any longer for this benefit."

Polls show overwhelming support for a prescription drug program, with 77 percent of voters saying it is appropriate to spend taxpayer money on such a program, according to a February survey by Andres McKenna Polling and Research, a Republican strategy firm in Washington.

But there's no need to even look at the polls, said one conservative Republican committee chairman, speaking on the condition of anonymity: "Nobody needs a poll. All you have to do is show up in your district."

He said Republicans simply have to put a policy forward.

"There are two things we do here: We do policy, and we do politics," the chairman said. "When it comes to prescription drugs, it's the politics of prescription drugs."

Republican leaders said the nature of medicine has changed since Medicare's first year, in 1966. Since then, they said, prescription drugs have become a much more prominent part of health care. That means it must be addressed in federal health insurance programs.

"I think part of it is the realization that it is impossible to have a modern medical delivery system for seniors without inclusion of the most important tools to help seniors," said Sen. Rick Santorum, Pennsylvania Republican, who voted for the bill in the Finance Committee yesterday.

He and several other conservative senators say they would like to have seen a smaller bill than the $400 billion, 10-year figure the House and Senate are using.

Some Republicans say whatever Congress passes will inevitably grow beyond expectation.

In Medicare's first year, 1966, it had a budget of $1 billion for hospital insurance, which was expected to grow to $9 billion in 1990. In reality, by 1990 the cost of hospital insurance under Medicare was $66 billion. The administration says that 2004 Medicare will spend more than $250 billion in 2004 to cover care for about 41 million seniors and disabled persons.

Some conservatives also said that Congress has left the reform out as they have rushed to a prescription drug package.

"Frankly, some Republicans run scared and used bumper-sticker rhetoric rather than talking common sense on this issue," said Rep. Ernest Istook, Oklahoma Republican, who said Medicare and its 160,000 pages of regulations are tying doctors up in red tape and bankrupting the American medical system.

Mr. Istook and Mr. Flake were two of only eight Republicans to vote against the prescription drug bill in 2002.

Mr. Flake said in past years it was clear the Senate and House weren't going to be able to agree on a drug program, so there was no danger in voting for it. But by voting for it without linking it to broad Medicare reform, Republicans have tied themselves to getting something done this year, even if it violates their principles.

"I think that's what we really have done over the last four or five years — we've talked about it, and we've let Democrats define what ought to happen," Mr. Flake said.

He and others praised President Bush for demanding reform at the same time, but they worried that the president will end up signing a bill that violates the principles of reform he laid out — just as he did with campaign finance reform or the education bill, which in the end did not include school choice provisions.

Mr. Istook said it is Republicans in Congress who haven't followed through.

"I believe Republicans could have if they would have. Frankly there's too much pandering on the issue, and not enough honesty and common sense," Mr. Istook said.

• Amy Fagan contributed to this report.

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