June 20, 2003
It’s Medicare Reform That Needs Reforming
The year was 1994, and the battle lines were drawn. Congress and the Clinton White House were locked in a budget showdown, and it was the GOP leadership on Capitol Hill that blinked first. After being shut down for several weeks, the Federal government came back to life, and popular tourist sites like the Washington Monument were again open for business.
Ah, yes, those were the good old days of gridlock. We didn't know how good we had it then. For if the Bush administration's maneuvering of its Medicare prescription drug coverage bill in Congress is any guide, there is a lot more to be feared about a legislative process that produces results than there is in one that is perpetually locked in battle.
By any reasonable assessment, the Federal government should be looking for a way to wind down its huge and growing commitment to funding medical care for senior citizens, instead of the dramatic expansion being contemplated in the Senate. That's not because we're numb or indifferent to the needs of the sick and the infirm. It's because the band-aids we keep putting on the system are making the problem worse.
For one thing, the circumstances that gave birth to universal entitlement programs like Social Security and Medicare have changed radically. In 1935 -- when Social Security was first established -- there was a stigma attached to receiving social welfare, much as there still is today. Yet in the depths of the depression, the needs of the poor, and in particular the poor elderly, were on the streets in front of us everyday.
The "genius" of the Social Security Act, which was continued when Medicare was enacted in 1964, was to make benefits available to all, regardless of income. The legislation freely borrowed from the language of insurance to describe itself, and thus distanced from any uncomfortable connection to "the dole" of welfare, went on to astonishing success.
But that success has come at a huge cost. Relatively speaking, there are many more older people now among us, and thanks to appreciation of financial assets like homes and stocks, many of them are quite well off. Does it really make sense for working taxpayers to dig into their pockets to pay for the ordinary medical expenses of the rich?
Yet legislation before the Senate today would have them pay even more. In an attempt to ease the crushing burden of prescription drug costs for those who cannot afford them, the Senate bill would extend some form of drug coverage to any and all.
That could be a gold mine for the roughly 78 percent of seniors who now have some kind of drug benefit. Their private plans will be only too happy to drop this expensive coverage, so that Uncle Sam can shoulder the cost. How is it "reckless" to return $350 billion back to taxpayers in the form of a tax cut, but not to commit billions more to a program that effectively uses an elephant to crush a flea?
But that's only part of the problem. Apart from co-pays and deductibles, which have grown by necessity, the Medicare system replaces the business relationship between patient-customer and provider-seller, with a bureaucratic one. That's a topic for another column, but suffice it to say this -- extending the system to cover half of the prescription drugs sold in the economy today will make the onerous costs of supporting that bureaucracy higher than ever.
It was once said that "programs for the poor are poor programs," meaning that legislation to help the indigent receives very spotty political support. Granting that, it must also be said that universal entitlements are richer than we can, or should, afford.
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