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Medicare
Monstrosity By
E. J. Dionne Jr, the They went in to design a prescription drug benefit for seniors and came
out with an aardvark. It's said that a camel is a horse designed by committee. But the camel
metaphor doesn't do justice to the Medicare prescription drug bill that
came out of a House-Senate conference over the weekend. It is not a
compromise but a weird combination of conflicting policy preferences. It
is unprincipled in the technical sense. Nobody's principles are served by
this bill. The problem is that many conservatives, especially in the House, don't
like Medicare as it is. They would prefer a system in which the government
guaranteed everyone a certain amount of money that could be used to buy
private health insurance. Ending Medicare as we know it is their long-term
goal. They call this "expanding choice." Most Democrats and many Republican moderates say this is a dangerous
illusion. As it stands, Medicare guarantees the real choices most seniors
care about -- a choice of doctors and treatment. That's why experiments
with HMOs have failed so far. The virtue of Medicare is that it creates a large risk pool. The
wealthy and the healthy are in the same boat as the poorer and the sicker.
Busting up Medicare's risk pool would almost certainly raise costs to
poorer and sicker seniors, as insurance companies make more money insuring
healthy people than sick ones. It would take an enormous amount of
regulation to prevent this sort of "cherry-picking." Now, what does any of this have to do with a prescription drug benefit?
Good question. If this were only about providing a limited prescription
drug benefit, Congress could have debated the best ways to cut up the $400
billion it has allocated for this purpose. The amount covers a little more
than a fifth of seniors' drug costs. Logically, this limited sum would
have been best used to help the poorest seniors who are not now covered by
Medicaid, and the sickest -- those whose drug costs are especially high. Instead, Republican negotiators, joined by Democratic Sens. John Breaux
and Max Baucus, went behind closed doors and decided to use the public's
demand for drug coverage as an opening wedge to change Medicare. The shame
of it is that Republicans and Democrats in the Senate had already reached
a real compromise. The bipartisan proposal, crafted in cooperation with
Sen. Ted Kennedy, was inadequate. Yet it was better than this bill. It
passed the Senate overwhelmingly because it left the larger Medicare
issues open for real debate later. But House conservatives weren't willing to go that far. They want
medical savings accounts, a tax cut for the wealthy in disguise, and they
insisted on experiments with privatization. But if privatization is such a good idea, why do the private insurance
companies need such big subsidies to enter the Medicare market? The bill
includes $12 billion for what Kennedy calls a "slush fund" to
subsidize the private insurers. That's not capitalism or competition. It's
corporate welfare. "They've created a huge bias in favor of private plans," says
Jeanne Lambrew, senior fellow at the Center for American Progress and a
professor at What about containing Medicare costs? Market principles would tell you
that with its huge pool of patients, Medicare could extract a good deal
from the drug companies. But the bill prevents the Medicare system from
doing that. "If you're serious about cost containment, you don't
block Medicare from using its enormous purchasing power to bring drug
prices down," says Robert Greenstein, executive director of the
Center on Budget and Policy Priorities. How do you know this bill is such a great deal for the drug companies
and HMOs? On word of an agreement last week, share prices of drug stocks
soared. Watch your television set for the millions of dollars in
advertising the drug and managed-care industry groups will spend to praise
this bill. Watch your wallet, too. It will be said that to oppose this bill is to oppose a prescription drug benefit. That's nonsense. After sending this aardvark on its way, congressional negotiators could get serious about a simple, straightforward prescription drug benefit that was supposed to be the real purpose of this enterprise. And, yes, let's then have a national debate on the future of Medicare, out in the open and not in some congressional back room. Copyright
© 2002 Global Action on Aging |
