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MEDICARE: Do-Over
St Louis Today
July 26, 2004
It's too late to hope the Congress that delivered last year's disastrous Medicare prescription drug bill will fix the mess it created. But it's not too early for voters to start demanding rapid changes from those now running for office.
Since the Medicare bill was approved, half-dozen serious shortcomings have become apparent. Any one of those shortcomings would be grounds for a do-over. Together, they make it crucial to rework the law.
The first and most serious shortcoming is the wrongheaded idea that most seniors are looking for lots of choices in health care. That's one of the ideas behind both the permanent drug benefit, which will go into effect in 2006, and the temporary drug discount cards seniors are being told to use until then. In the case of the discount cards, seniors are expected to select the plan that's best for them from among more than 70 being offered around the country.
That's absurd. More choices create more confusion. The people who could benefit the most from the cards - the sickest and poorest elderly patients - are least equipped to make sense out of the thicket of details and disclaimers. As a result, fewer than one in seven low-income seniors has signed up for them, and many of those folks were enrolled automatically. And they're the only group for whom the decision to enroll is clear cut.
Despite promises to the contrary, the poorest Medicare recipients aren't likely to get much relief when the full benefit kicks in. Before the bill passed, they often got drugs for free under Medicaid. Having aged onto the Medicare rolls, they'll face premiums and co-pays.
We reluctantly opposed the Medicare bill when it was rushed through Congress in the dead of night. But we believed, apparently naively, the pledge made by President George W. Bush not to sign a drug plan that cost more than $400 billion over 10 years. It turns out there was a 35 percent fudge factor built into that promise. Oops.
At the time of the vote, the administration knew the bill's cost would actually be around $540 billion. Yet Thomas Scully, a senior Medicare/Medicaid administrator, refused to allow that figure to be shared with Congress. Mr. Scully resigned immediately after the bill was passed and went to work as a consultant for a lobbying firm and an investment company that represent Medicare providers.
Mr. Scully's refusal becomes even more outrageous when you consider that the Medicare bill specifically prohibits the federal government from using its enormous purchasing power to negotiate the lowest possible drug prices for millions of Americans. That's a huge boon for drug companies - which already have increased prices for popular drugs by more than three times the rate of inflation so far this year - and a slap in taxpayers' faces.
Add to that the 3.8 million retirees expected to lose drug coverage from their former employers when the new benefits kick in. That's despite $71 billion in subsidies the government will pay between 2006 and 2013 to employers who continue providing retiree drug coverage.
The bill contains other serious flaws, too many to thoroughly detail here. Perhaps the most alarming, in light of the $540 billion cost estimate, is a provision that could threaten Medicare's future. When projections show that general revenue will account for more than 45 percent of the program's funding, the president and Congress would be required to cut its funding. When the benefit's estimated cost was $400 billion, experts thought that 45-percent threshold would be reached within a decade. Newer estimates mean it will come sooner.
Revising this poorly considered bill is not a partisan issue. Plenty of Republicans, especially fiscal conservatives, are outraged at the lack of cost controls and outright deceptions in cost projections. The time to demand action is now, before the inevitable train wreck occurs.
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