Politics & Policy

Kevorkian-Style Policy Prescription

Scandal-plagued Medicare drug benefit should go.

While controversy engulfs President Bush’s keystone foreign policy, the war on terror, one of his chief domestic programs looks as if it were rearranged by a smart bomb.

The brand-new Medicare drug benefit was supposed to drag that 1960s scheme into the 21st century and boost GOP political fortunes. Instead, it has ignited a growing scandal and hobbled Medicare’s already wobbly finances. Republicans should admit their massive mistake and repeal this boondoggle. Instead, they should enact a smaller, cheaper measure for low-income seniors who lack pharmaceutical insurance.

The same day former counterterrorism adviser Richard Clarke’s testimony before the September 11 Commission dominated headlines, Medicare’s chief actuary, Richard Foster, explained that he knew this proposal would exceed the $395 billion price tag the Bush administration waved about.

“The earlier estimates,” Foster told the House Ways and Means Committee March 24, “were in the range of $550 billion through fiscal year 2013, just for the drug part.” Last June 11, Foster predicted the Senate’s drug bill, similar to the final package, would cost $551.5 billion. (See his spreadsheet here.)

Even worse, Foster’s supervisors prohibited him from alerting congressmen and their staffers to this huge discrepancy. When they requested his figures, Foster testified that his then-boss, former Medicare administrator Thomas Scully, threatened to fire him if he sent his numbers to Capitol Hill, as Foster routinely has done throughout his 31-year career.

“I felt a very strong responsibility on behalf of the public not to withhold technical information that could be useful in this debate,” Foster said. “I had a difficult choice,” he added. “I could ignore the orders. I knew I would get fired…I considered that inappropriate and, in fact, unethical.”

Democratic Ways and Means aide Cybele Bjorklund echoes Foster’s account. She said on ABC’s Nightline March 25 that Scully told her that if Foster gave her his calculations, “I will fire him so fast, his head will spin.”

Scully–a former Bush political appointee–disputes this and claims he was kidding when he said he would sack Foster.

Scully’s administrative assistant, however, considered this no laughing matter. In an e-mail that the Wall Street Journal published on March 18, Jeffrey Flick told Foster, “Work up the numbers and share them with Tom Scully only. NO ONE ELSE.” He continued in bold face: “The consequences for insubordination are extremely severe.”

The joke escaped Foster, too. He took his supervisors’ admonitions seriously enough to discuss them with a Center for Medicare and Medicaid Services attorney and considered resigning in protest.

Foster is no Kerry for President shill. He testified he first registered Democrat in 1972 “so that I could vote against George Wallace in the Maryland primary.” While he “never got around to changing my registration,” he continued: “I suppose that I’ve voted for every Republican presidential candidate ever since 1972, except the one year that I wrote in Jack Kemp,” the GOP ex-congressman from New York.

Scully, Flick, and White House economic aide Doug Badger are among those who have been called to the Ways and Means Committee’s second hearing to discuss what they know about this matter. The panel convenes at noon today.

As the committee might discuss, this intimidation of Foster may have been criminal.

“Mr. Foster was prevented from informing Congress that it was poised to take action that would result in a cost to the Treasury of almost $140 billion more than Congress understood,” Senators Clinton of New York, Lautenberg of New Jersey, Kennedy of Massachusetts, and Stabenow of Michigan wrote Attorney General John Ashcroft on March 24. For once, these left-wing Democrats are right. “We believe that at least two Federal criminal statutes were possibly violated by officials at the Department of Health and Human Services (HHS), the Office of Management and Budget (OMB) and the White House: 1. Obstruction of Proceedings Before Departments, Agencies and Committees…and 2. Fraud and False Statements.”

The same day, the Washington-based Government Accountability Project stated that it “has determined that threatening Mr. Foster violated seven laws,” including the Congressional Right to Know Act and the Whistleblower Protection Act.

With Foster effectively bound and gagged for more than five months, and his prognoses unknown to Democrats and rank-and-file Republicans, the House of Representatives passed the drug plan by just five votes on November 22. Fiscal conservatives, already wary of this legislation, would have killed it had they known it really cost 35 percent more than advertised. The White House finally confessed January 29 that the benefit will consume at least $534 billion, a total eerily close to Foster’s suppressed June 11 appraisal.

This enormous new entitlement, available even to wealthy seniors, already has cracked an axle on the creaky Medicare wagon. The system’s trustees reported on March 23 that the drug plan’s extra weight has helped speed Medicare’s projected bankruptcy from 2026 to 2019.

This fiscal malpractice has not bought the White House even political dividends. An August 25-26, 2003 Gallup poll found 40 percent of adults approved of the president’s handling of Medicare while 48 percent disapproved. After the benefit’s adoption, a March 26-28, 2004 Gallup survey saw 35 percent approve of Bush on Medicare, while disapproval climbed to 55 percent. What a bargain: Each one-point drop in Bush’s Medicare approval rating cost Americans $44.5 billion.

The GOP Congress should dump the drug benefit. They should spare taxpayers this absurdly expensive new project whose true costs were concealed by an administration that sacrificed integrity and fiscal responsibility on an altar of blind ambition.

Instead, Republicans should develop a modest plan for poor seniors who lack coverage, rather than any American over 65, including multimillionaires and those who already have drug insurance.

The Medicare drug benefit has metastasized from bad policy to bad politics and now to scandal and possible criminality. This law begs to be euthanized. The GOP should pulls its plug. As for the perpetrators of this colossal public fraud, the Justice Department should fit them for orange jumpsuits.

Members of the National Review editorial and operational teams are included under the umbrella “NR Staff.”

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