Bush's Troubling Medicare Plan


George W. Bush has at last revealed the outline of his Medicare/drug benefit plan. One is reminded of Anatole France's famous line that "the law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges."

Governor Bush's plan allows the poor as well as the rich to choose to pay high premiums for prescription drug coverage (or to choose instead, say, to eat). What Bush's plan does not do is to guarantee basic drug coverage to everybody. Gore's doesn't quite achieve that either, but it comes a lot closer and does so without dismantling Medicare.

Bush's drug plan is wrapped in a fundamental privatization of Medicare, which would turn most of the program over to managed-care companies. He depicts this as free choice for consumers, versus the more bureaucratic approach sponsored by Gore and the Democrats.

But what Bush calls bureaucratic actually equals free choice, and what he calls private equals limited choices. In the topsy-turvy world of health insurance it is government-sponsored programs like Medicare that give participants completely free choice of hospital and doctor, while the private health plans limit whom you can see, where you can be treated, and whether nominal coverage actually translates into treatment.

Bush's idea of privatizing Medicare has long been promoted by conservative congressmen and the insurance industry.

Seniors would be given a flat voucher, which they could spend either on traditional Medicare or on private Medicare policies run by managed-care companies. The government's contribution to the voucher would be capped, so that seniors who wanted decent coverage would have to dip into their own resources.

There are multiple problems with this approach. For one thing, it has been tried and found wanting. Under a waiver provision of the current Medicare program, health insurers already can compete with conventional Medicare by taking your Medicare premium and in exchange offering more generous benefits than standard Medicare provides.

How can they do that? By very carefully marketing the program to healthier than average seniors, and then by rigidly limiting what treatments will actually be covered as opposed to what's promised.

At first, Medicare managed-care plans were a big money maker for insurers. But soon, sicker people started signing up, and companies started losing money. In the past two years, millions of elderly people were dropped from coverage because the health insurers found they couldn't make enough money on them.

This is the basic approach Bush espouses. The main thing it encourages is a waste of billions of health dollars in marketing costs as insurance companies try to weed out the sick from the healthy.

Then, Bush would have the government subsidize part of a new drug benefit, run through the managed-care plans. Though details are obscure, its clear that most drug costs would still be paid out of pocket for most people. Bush's plan needlessly adds costs by ducking the issue of drug prices and letting the drug industry charge what ever they want.

While he is working out the details of his Medicare/drug plan, Bush would give the states $48 billion over four years to subsidize interim drug coverage for the poor and near-poor. But people with incomes over about $15,000 (most seniors) would get no benefit, except for a provision that the federal government would begin paying for drug costs once they exceeded a total of $6,000 a year.

The unreality of this provision is stupefying. How does somebody making $15,000 afford to pay the first $6,000 in prescription drug costs? What do they forgo, food or rent?

The states are in no position to set up this program. State health insurance programs for the poor are already a patch work. In the name of resisting bureaucracy, Bush would require the states to set up 50 new bureaucracies.

The sensible approach, surely, is to add a straightforward prescription drug benefit to Medicare, and keep the Medicare program intact. Gore's proposed program requires beneficiaries to pay some costs out of pocket, but at least it sets up a universal drug benefit.

By actually proposing policy details, Bush is playing on Gore's home court, and not playing very well. You can see why he is resorting to Buddhist temple ads and ducking full debates.

If people actually pay attention to issues, its awfully hard to see how Bush will win. He may lose anyway, in a cloud of unfortunate bloopers, but how much better for the quality of public debate for him to lose, deservedly, on the issues.

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