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Medicare Drug Plan Promotes Dependence on Government

The House Version of the Medicare Bill Passed by Only One Vote

By Deroy Murdock
July 10, 2003

As America celebrates 227 years of independence, Washington promotes Americans' dependence on government. The Medicare drug entitlement hurtling through Congress is a $400 billion/ten-year overdose of outlays and regulations that addresses an overstated need. If the Founding Fathers' legacy means anything, this bill should be scrapped and replaced with pro-freedom legislation.

Congress' advice here is: "Take eight aspirin and call us in the morning." It offers a 100 percent solution to a 24 percent problem. Thus, Congress prescribes more than four times the necessary portion of big government.

According to the Centers for Medicare & Medicaid Services, 76 percent of seniors possess drug insurance through pensions, Medicaid or private policies. Only 24 percent don't. Of these, some have low drug expenses. Others need no public assistance. And still others face high drug bills and low incomes. These Americans deserve society's compassion and targeted, narrowly tailored public relief.

But instead of local painkillers, Congress is administering general anesthesia. All seniors are eligible for the House and Senate plans, including those with existing drug coverage. Beside destitute grandmothers surviving on Social Security, Leona Helmsley, Happy Rockefeller, and Gloria Vanderbilt also could have their pharmacy bills partially subsidized by low-income taxpayers starting jobs, families and small businesses.

It takes a billionaire to appreciate this initiative's long-term cost. As the aptly-named Medicare trustee, Thomas Saving, estimated in the June 24 Wall Street Journal, this drug benefit would create a new, unfunded liability of $7.5 trillion. That's $7,500,000,000,000.

This "reform" measure also is hopelessly complex. Rep. Ron Paul (R., Tex.) bitingly dubs it "HillaryCare, Republican Style." S1 — the 654-page Senate version, online (at — boasts 101 miscellaneous provisions and 101,633 words. Among its more riveting passages is this excerpt from Sec. 421:

For purposes of payment for services furnished on or after January 1, 2004, and before January 1, 2008, after calculating the work geographic indices in subparagraph (A) (iii), the Secretary shall increase the work geographic index to the work floor index for any locality for which such geographic index is less than the work floor index.
If you fathomed that, dig this:

(c) TECHNICAL AMENDMENT - Sections 1842 (b) (6) (E) and 1866 (a) (1) (H) (ii) (42 U.S.C. 1395u (b) (6) (E); 1395cc (a) (1) (H) (ii) ) are each amended by striking "section 1888(e) (2) (A) (ii)" and inserting "clauses (ii), (iii), and (iv) of section 1888 (e) (2) (A)"

Under the Senate's bill, seniors would pay $35 monthly premiums plus $275 yearly deductibles. Beyond that, taxpayers cover half of drug costs up to $4,500. Then — in a so-called "donut hole" — coverage totally vanishes until pharmacy costs hit $5,812.50, above which today's workers foot 90 percent of those bills. Got that?

Republicans hope to remove this matter from next year's election (what could be worse than issue-filled campaigns?). Good luck. Just imagine Senator Ted Kennedy (D., Mass.) yelling, "Fill the -uh — donut!" to underwrite drug bills between $4,501 and $5,812.49.

If this sounds paranoid, consider Kennedy's June 18 statement to CNN's Judy Woodruff: "When we get this as a down payment, we're going to come back again and again and again..." Kennedy's fellow Democrats will demand higher expenditures, lower premiums, and slashed deductibles. And if Republicans object, Democrats will accuse them of orchestrating Granny's slow, painful, prescription-free demise.

Despite the GOP's allergy to principle, seniors seem unimpressed. A June 23 Galen Institute/Zogby survey found that 74 percent of those with drug insurance rate the Senate plan worse than their current coverage. Also, this benefit would not begin until January 1, 2006, 60 weeks after the November 2004 elections. The GOP's hurry-up-and-wait strategy is reckless policy and dubious politics.

Time is not on the GOP's side, argues Ed Haislmaier, visiting research fellow at the Heritage Foundation's Center for Health Policy Studies in Washington, D.C. "Not only does this legislation not get this issue off the table before election day; it gives seniors time to figure out who's going to get less coverage under this measure."

Seniors "who have employer-sponsored retirement coverage are going to see it dropped or scaled back," Haislmaier predicts. Hence, "the drug benefit is going to be like a rotting carcass in the middle of the table come Election Day."

If Haislmaier sounds alarmist, so does the Congressional Budget Office. It expects 37 percent of seniors with employer-funded drug policies to lose them as their former bosses hip-check these obligations to Uncle Sam.

This plan should be torn up and rewritten. True reform would let seniors who like traditional Medicare keep it, while critics could drop it. Needy elders would receive payments, on a scale that slid as incomes rose, to help purchase private plans with features (drugs, vision care, chiropractic, treatment by doctors they prefer, etc.) to suit their tastes.

Sue Blevins, president of the Washington-based Institute for Health Freedom, insists that "any Medicare reform should state clearly that enrollment in all parts of Medicare is voluntary, and that seniors are free to choose and pay privately for all of the health-care services of their choice."

Republicans should stop aping Democrats. They should pitch seniors on freedom, choice and, when poverty persists, the public resources to fund these things. Senate Majority Leader Bill Frist, M.D. — who, unlike Ted Kennedy, actually has performed open-heart surgery — should be able to sell this. President Bush, who recently dislodged an entrenched dictator in three weeks, also should be able to trounce Cape Cod's 71-year-old socialist warhorse with a message of patient power. If only they tried.

The House measure passed by one vote on June 27 [2003] at 2:33 A.M. Three skeptical Republicans were among those whose arms the House leadership twisted before approval: [Oklahoma's Ernest Istook, North Carolina's Sue Myrick, and Pennsylvania's Pat Toomey].

And remember this: If Republicans controlled Congress and the White House, this headache never would have happened.

Mr. Murdock is a columnist with the Scripps Howard News Service.