Medicare -- the giant health plan now covering 40 million elderly and disabled Americans -- is about to go through the largest expansion since it started almost 40 years ago. The House and Senate are now finishing up work on a new drug benefit. The White House wants it before the Fourth of July weekend so thePresident can sign it into law with flags unfurled and elderly Americans cheering.
Hold the applause. The bill that's emerging from Congress represents a squandered opportunity to change a system that's out of control.
There are no real reforms here, folks. Instead, the new bill is a hodge-podge that gives every major player what it wants. Private insurance companies will get to manage the new drug benefits, which means they'll get a nice cut. The pharmaceutical industry will get lots of business without having to worry aboutdirect price controls, which is good news for their bottom lines. And the elderly will get what they want, too, which is more subsidies covering the escalating prices of drugs.
The tab over the next ten years: $400 billion. The cost for future generations:about $7 and a half trillion.
Bush and the Democrats have missed a huge opportunity for reform. What ever happened to the idea of cost controls? There's nothing in the legislation that requires pharmaceutical companies to, say, license generic versions of their drugs after a certain number of years or a certain level of sales. What ever happened to means testing? There's nothing in the legislataion that makes wealthier beneficiaries pay more for drugs out of their own well-lined pockets.
Medicare and Social Security already take almost 40 cents out of every dollar spent by the federal government, and we aint seen nothing yet. Even without thenew drug benefit, these programs are heading into the stratosphere. Tens of millions of post-war baby boomers are moving toward the shores of retirement like a giant tidal wave. I just turned 57 and believe me, I'm not alone. In eight years early boomers start collecting Social Security and Medicare. And now, a drug benefit.
Add in $400 billion a year for the military and a giant $1.7 billion tax cut mostly for the wealthy and it's no wonder that in the past two years under George W. Bush, the size of the federal government as a proportion of the national economy has grown faster than it has in a quarter century.
Where will the money will come from? Ultimately, from higher taxes and fewer services for average working Americans. But they won't know it until far after the 2004 election, which -- if you pardon my cynicism -- is really what this new drug benefit is all about.
