Politics & Policy

Medicare’S Liver and Onions

We want a new drug plan.

While seeing relatives in Port Limon, Costa Rica in 1999, I stepped into my great aunt’s house after a late-morning stroll.

“What’s for lunch?” I asked.

”Liver and onions,” she triumphantly announced.

Trying to offend neither my dad’s sister nor my visiting grandmother, I sat down and ate an oily serving of fried, seasoned organ meat. I soon smilingly accepted a second helping. Calmly, I ignored the bellyaching of my inner food critic who feared that something so greasy could not be so healthy.

The GOP Congress seems equally resigned to grit its collective teeth and swallow a massive Medicare prescription-drug benefit. Deep down, Republican lawmakers surely lack the appetite for this fat-drenched legislative entree. Yet they look obligated to finish it, as if leaving their meal untouched would be impolite. Instead, they should send this pricey dish back to the kitchen and order a snack instead. Here’s why: First, neither seniors, activists nor anyone else seems to want this plan. Rather than rally around it, elders have oscillated between passivity and hostility as House and Senate conferees try to craft a compromise bill for the president’s signature.

On the left, the Washington-based US Action Education Fund complained last month that “a substantial portion of Medicare beneficiaries will not save any money under the proposed bills.” On the right, Robert Moffitt, a Heritage Foundation health analyst, asks: “What in the name of God is the administration thinking? The Medicare bills are a policy disaster.”

Second, the House and Senate bills “oversolve” a much smaller problem. According to the Congressional Joint Economic Committee, only 22 percent of seniors lack prescription insurance. Rather than address this specific challenge, Congress voted to cover 100 percent of seniors, including the 78 percent of them who already have drug coverage. Such frantic behavior earns adolescents Ritalin.

Third, with the 2004 federal deficit projected at $480 billion, these drug bills constitute fiscal pornography. The Congressional Budget Office (CBO) predicts that the Senate legislation would cost $432 billion over 10 years. That is an opening bid. At its 1965 birth, Medicare’s predicted annual budget was $10 billion. CBO forecasts 2004 Medicare spending at $288 billion. Through 2030, Heritage projects, the drug provision alone could cost $2 trillion, or precisely $2,000,000,000,000.00.

The National Taxpayers Union calculates that Medicare already will consume 9.3 percent of GDP in 2077. With a drug benefit, that day arrives in 2045, 32 years sooner.

Like an insatiable tapeworm, a universal drug entitlement will devour resources that could finance tax relief or individual Social Security accounts. Liberals should beware, too. Every dollar spent subsidizing prescriptions for David Rockefeller and Leona Helmsley (Yes, they could participate) is one fewer dollar available for Head Start or public broadcasting.

Fourth, this drug benefit will harm senior citizens. According to CBO, between 32 and 37 percent of beneficiaries (or 3.9 to 4.5 million individuals) would lose their private drug coverage as companies unload this portion of their pension liabilities onto ever-generous Uncle Sam.

Finally, there are better ways to help seniors secure coverage. Launched in 1960, the Federal Employee Health Benefits Program lets congressmen, federal workers and their spouses choose from among six to 27 health policies (varying by state), all featuring prescription plans. Some 160 people manage FEHBP for its 9 million participants versus the 4,000 who administer Medicare for its 34.46 million aged beneficiaries. The House shamelessly voted to shield federal retirees, including themselves, from the proposed drug plan. Instead, lawmakers should let every senior enjoy FEHBP as they do.

Alternatively, Congress could adopt the “Pharm-Assist” plan that I rafted with the help of Heritage scholar Rea Hederman. It would give low-income seniors without coverage “Drug Stamps” to purchase pharmaceuticals. This targeted effort would cost $118.1 billion through 2013, a 73 percent savings over what Congress has voted to spend. (See here.)

Besides President Bush–who said, “My pen is ready. I’m ready to sign a good bill.”–hardly anyone hungers for a brand-new, budget-busting, universal drug entitlement. Congress should take the mammoth feast it has prepared and drop it down the garbage disposal. Far lighter fare is in order, and only for those who need it.

Deroy Murdock is a Manhattan-based Fox News contributor and a contributing editor of National Review Online, and a senior fellow with the London Center for Policy Research.


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