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Great Society Ii?
Bad drug deal.


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Deroy Murdock

Irresponsibly, Congress is treating the lack of prescription-drug insurance among some seniors as if it were as common to old age as gray hair. In reality — a state of existence from which Capitol Hill and the White House routinely depart — 76 percent of seniors currently have pharmaceutical coverage. Rather than target assistance to the remaining 24 percent of seniors, the GOP Congress is crafting a Medicare reform package that President Bush is desperate to sign. This brand-new entitlement — estimated ten-year cost: $400 billion — looks frighteningly like something hammered together by another Texas politician: Lyndon Baines Johnson. All Americans over 65 could participate, even multimillionaires with drug coverage.

To prevent Bush from using this surgical-strength legislation to convert compassionate conservatism into Great Society II, pro-market congressmen should pull the plug on this measure and start anew.

One alternative is what I call Pharm-Assist. Starting next January 1 (rather than 2006, as Congress plans), it would cover low-income seniors who lack drug insurance. Those now covered would rely on their existing plans.

Applicants would need incomes no higher than 200 percent of the poverty line, ($17,256 for singles; $21,748 for couples). Congressional Joint Economic Committee data indicate that some 3,395,000 seniors would qualify. Retired bankers and lawyers would fill their prescriptions without taxpayer help.

Pharm-Assist would give enrollees coupons for free prescriptions at retail outlets which Medicare, in turn, would reimburse. These drug stamps would total $2,793 per beneficiary next year — double the $1,356 that the Kaiser Family Foundation estimates average seniors without drug insurance will spend this year, plus three-percent inflation.

Warning: Seniors could hike this benefit’s costs through overuse. How can they be dissuaded from buying Prozac for, say, muscle pain? Seniors would receive incentives to purchase drugs they need, not whichever they want.

Thus, Pharm-Assist would offer beneficiaries year-end checks for half the value of their unused drug stamps. Seniors would get medication they truly require, and those who compare prices and buy sparingly would earn cash to spend at will.

Under the Senate plan, someone with $4,000 in annual drug purchases would get a 50 percent discount after a $275 deductible. That’s $1,862.50 on her next $3,725 in expenditures. Add a $420 insurance premium, and her total cost is $2,557.50.

Under Pharm-Assist, however, her $4,000 purchases minus $2,793 in drug stamps would cost $1,207, just 47.2 percent of what the Senate expects Grandma to pay.

Rea Hederman of the Heritage Foundation’s Center for Data Analysis has examined Census Bureau population-growth projections and assumed three-percent inflation and stable elderly poverty. Consequently, he places Pharm-Assist’s 10-year budget at $118.1 billion, just 29.5 percent of the Senate bill’s cost. Remember: Seniors who economize their drug stamps save taxpayers even more.

Compassionate? You bet. Conservative, yes — or at least more so than the 1960s-style fiscal bacchanal currently in production.

Republicans should enact such a focused remedy. Instead, the House and Senate prescriptions (now in reconciliation) so insistently apportion an aspirin to every senior that they deny comprehensive help to the truly needy.

Republicans hope to “take this issue off the table” before the 2004 midterm elections. Of course, they always could adopt the entire Democratic agenda. Why not hike taxes, ban guns and flee Iraq? That would stun Democrats into silence!

The patron saint of American liberalism, Senator Edward Moore Kennedy (D., Mass.), also is behind this mess. Though Kennedy battles them at every turn, the president and top Republicans have given him the keys to the drug-coverage sedan. Republicans inexplicably campaign against people like Kennedy, then hand them the wheel on major legislation.

When Dianne Feinstein (D., Calif.) and Don Nickles (R., Ok.) tried to attach a modest affluence test to the Senate’s Medicare proposal on June 26, Kennedy threatened to drive the entire vehicle off a pier.

“You can have this amendment, or you can have this bill, but you can’t have both,” Kennedy bellowed, according to Roll Call. “Philosophically,” Feinstein reasoned, “I believe taxpayers shouldn’t subsidize people who can afford to pay.”

The GOP Senate backed Kennedy and killed the amendment, thus ensuring a universal benefit for seniors — from America’s housing projects to its boat basins.

How ironic: The same Ted Kennedy who slams Republicans for “a tax cut windfall to the wealthy few” doomed prospects for a generous drug benefit reserved for the elderly poor. Instead, under-served seniors will see skimpier assistance so taxpayers can coddle folks like Kennedy’s fellow Cape Cod yachtsman, Walter Cronkite. Invertebrate Republicans notwithstanding, Ted Kennedy should hang his head in shame.



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