BUSH'S BOGUS MEDICARE REFORM
Author(s): ROBERT KUTTNER Date: March
5, 2003 Page: A23 Section: Op-Ed
WAR DRUMS IN THE MIDDLE EAST ARE PROVIDING THE BUSH ADMINISTRATION WITH CAMOUFLAGE
FOR DOMESTIC POLICIES SO DREADFUL THAT THEY COULD NOT WITHSTAND THE SCRUTINY
OF FRONT-PAGE ATTENTION.
Take Bush's designs on Medicare. What the administration really wants is to privatize
Medicare. This means that seniors would be herded into HMOs. The federal government's
annual contribution would be capped. If you couldn't afford decent HMO coverage
(if there is such a thing), too bad.
This strategy neatly serves two conservative purposes. First, privatize everything
possible. Second, cut federal social outlays, the better to finance tax cuts
for upper brackets. Unfortunately for Bush, Medicare is justifiably popular.
Despite all the Republican blather about "choice," the one health plan for older
Americans that provides completely free choice of primary-care doctors, specialists,
hospitals, and treatments is, of course, good old conventional Medicare. As even
the doddering know from bitter experience,
it is HMOs that restrict choice.
However, Medicare does not provide prescription drug coverage. Why not? Mainly
because the pharmaceutical industry has resisted comprehensive Medicare drug
coverage, fearing that the government would use its bargaining power to trim
exorbitant drug industry profits.
Now the White House is using the widespread clamor for prescription drug benefits
to manipulate seniors into "choosing" HMOs, using Medicare reform
as the bait.
Last month the White House leaked plans providing drug coverage to seniors who
opted for HMOs while giving none for people who stayed with traditional Medicare.
Howls of protest, from Republican as well as Democratic lawmakers, sent that
crude idea back to the drawing board.
The administration's latest scheme is a poorly disguised variation on last month's
plan. In a proposal carefully worked out with the pharmaceutical and HMO lobbies,
seniors would get drug benefits under conventional Medicare but with astronomical
deductibles - between $4,500 and $7,500. You'd have to pay that much money out
of pocket before a penny of prescription drug coverage would kick in. To put
that number in perspective, $7,500 is more than a third of the median income
of the typical 70-year-old.
This token drug benefit, plus a very modest discount card that is mainly a marketing
ploy of the drug industry, is expected to fool seniors into believing that Bush
is offering drug coverage under Medicare. But the out-of-pocket deductibles are
so exorbitant that fewer than 10 percent of the elderly would actually get any
Under Bush's plan, coverage for routine prescription expenses would be available
if you shifted from traditional Medicare to a private HMO, but many other restrictions
would offset the increased drug benefits.
We have been down this road before. In the 1990s, the HMOs thought they could
profit from targeting the senior-citizen market, and Congress hoped to save money
by giving HMOs a shot at managing costs.
HMOs advertised heavily, promoting - among other benefits - prescription drug
coverage. They also tried to target healthier segment seniors, using come-ons
such as health clubs (bedridden critically ill people are not attracted
But many of the people who opted for HMOs had the effrontery to get sick. HMOs
turned out to be less efficient than traditional Medicare. So HMOs unceremoniously
dumped millions of money-losing patients. Others, who didn't like the limits
on choice, moved back to traditional Medicare voluntarily.
So the Bush approach to Medicare reform had a full field test, and it flunked.
No wonder Bush needs a war of mass distraction.
Medicare does need reforming, and older people do need prescription drugs. The
Democrats' plan is better: It allocates more federal money, does it via traditional
Medicare, and uses government's buying power to reduce drug costs.
But neither party really wants to tackle Medicare costs, and both have tried
to solve the problem on the cheap by just reducing payments to doctors, hospitals,
and medical education. Once there was plenty of fat to squeeze out, but today
the budget cutters are cutting into bone.
One of the major parties should realize that true Medicare reform can come only
in the context of universal, national health insurance, so that every possible
penny goes to delivery of health care rather than to marketing schemes and insurance
Ideological zealots tend to overreach. Bush's bogus Medicare reform could do
useful damage at the ballot box. If he pressures Republicans into backing it,
Democrats will have a fine election issue. But that will be small comfort to
America's retired people, who will find themselves with less choice and higher
out-of-pocket costs if they want decent health care.
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