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The
Rush to Kill Medicare
By Robert Kuttner, the
Boston
Globe
November
19, 2003
The Bush administration's Medicare bill is a calculated first step towardending universal Medicare in favor of vouchers. President Bush and his
congressional allies have deftly baited this hook with meager prescription
drug benefits.
With legislators wanting to go home for Thanksgiving, the White House hopesto force a vote by this weekend. The haste is understandable: The more this
cynical bill is exposed, the less legislators will fear voting against it.
Consider:
Skimpy Drug Benefits.The administration refused to confront the pricing power of drug companies.
So the government would be billed at exorbitant prices, and the new $40
billion a year in benefits would cover only a fraction of consumers' drug
expenses.
Under the formula, if you incurred $3,600 of annual drug costs, the programwould cover only $1,285. (It covers 95 percent after $3,600, but a lot of
people would not participate at all because they couldn't afford the upfront
costs.)
Capped Benefits.The administration's real goal is to shift Medicare from a public program to
a private one, with the government's contribution capped. For the right,
it's a threefer: contain government's costs, shift risks to consumers, and
let private industry cash in. Heathier and wealthier people could supplement
the voucher with their own resources. Poorer and sicker ones would get
diminished coverage.
The bill authorizes "experiments" in six metropolitan areas, where privateinsurers subsidized by the government could lure healthy seniors away from
traditional Medicare. However, past experiments with Medicare HMOs
demonstrate that they are far less efficient than public Medicare and leave
government holding the bag for the sickest patients. Medicare works because
it is a universal insurance pool. Fragmenting that pool can only raise
costs, divert profits, and compromise care.
Means-testing.The bill subjects poorer seniors to an assets test and raises Medicare
premiums for middle- and upper-income seniors. It also effectively bans drug
imports from Canada. And it actually reduces drug benefits for people on
Medicaid and those with private retiree coverage.
It's dismal policy. Viewed as a bill for special interests, however, theMedicare legislation is sheer genius.
Pharmaceutical companies get to sell more drugs at prices they set.Hospitals and doctors receive additional payments. Insurers get to run a
lucrative new program with government subsidies. And corporations that are
paying health benefits to retirees get new tax breaks worth $18 billion.
The administration also deftly coopted the feeble giant AARP. As recently aslast July, the AARP's president, William Novelli, warned that "any final
conference agreement should not destabilize Medicare nor penalize those
beneficiaries who choose to stay in the current Medicare program." But this
is exactly what the conference bill does.
Sources close to AARP say that Novelli and his lobbyists, often allied withDemocrats, wanted to point to a bipartisan accomplishment.
When AARP's $7 million advertising program in support of the bill wasannounced, the organization's switchboard jammed with angry calls. AARP has
long been a business conglomerate selling products to the elderly posing as
an advocacy group. Novelli is taking a huge gamble. The more his members
appreciate what's really in this bill, the more his move could backfire.
Last spring the Senate passed a more moderate bill in which liberals led bySenator Ted Kennedy somewhat reluctantly traded expanded drug coverage for
sponsorship by private insurers rather than via public Medicare. However,
Kennedy's bottom line was: no serious tampering with the rest of Medicare.
Democrats gambled that the Republicans, in order to get a bill, would haveto meet liberals halfway. But White House officials concluded that by
playing interest-group politics they could peel away enough votes for their
plan and ignore the liberals.
Bush's bet is that the Democrats are damned either way. Either voters don'tread the fine print and Democrats get tarred for opposing a drug benefit
bill in an election year or they are made to collude in voucherizing
Medicare.
While two center-right Democrats, John Breaux of Lousiana and Max Baucus ofMontana, supported the conference bill, Kennedy as well as the Democratic
leader, Tom Daschle of South Dakota, and whip Harry Reid of Nevada oppose
it, as do most Senate Democrats and seven moderate Republicans.
If the Senate's liberals and moderates can withstand the pressure for aquick vote, the bill's deficiencies will come to light. And at least 40
senators -- the number needed to filibuster -- will realize that it's better
election-year politics to resist wrecking a much-loved program than being
complicit in its demise.
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© 2002 Global Action on Aging
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