Bush's bogus Medicare reform

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http://www.boston.com/dailyglobe2/064/oped/Bush_s_bogus_Medicare_reform+.shtml

 

Bush's bogus Medicare reform

 

By Robert Kuttner, 3/5/2003

Boston Globe

WAR DRUMS in the Middle East are providing the Bush administration with

camouflage for domestic policies so dreadful that they could not withstand the

scrutiny of front-page attention.

Take Bush's designs on Medicare. What the administration really wants is to

privatize Medicare. This means that seniors would be herded into HMOs. The

federal government's annual contribution would be capped. If you couldn't afford

decent HMO coverage (if there is such a thing), too bad.

This strategy neatly serves two conservative purposes. First, privatize

everything possible. Second, cut federal social outlays, the better to finance

tax cuts for upper brackets.

Unfortunately for Bush, Medicare is justifiably popular. Despite all the

Republican blather about ''choice,'' the one health plan for older Americans

that provides completely free choice of primary-care doctors, specialists,

hospitals, and treatments is, of course, good old conventional Medicare. As even

the doddering know from bitter experience, it is HMOs that restrict choice.

However, Medicare does not provide prescription drug coverage. Why not? Mainly

because the pharmaceutical industry has resisted comprehensive Medicare drug

coverage, fearing that the government would use its bargaining power to trim

exorbitant drug industry profits.

Now the White House is using the widespread clamor for prescription drug

benefits to manipulate seniors into ''choosing'' HMOs, using Medicare reform as

the bait.

Last month the White House leaked plans providing drug coverage to seniors who

opted for HMOs while giving none for people who stayed with traditional

Medicare. Howls of protest, from Republican as well as Democratic lawmakers,

sent that crude idea back to the drawing board.

The administration's latest scheme is a poorly disguised variation on last

month's plan. In a proposal carefully worked out with the pharmaceutical and HMO

lobbies, seniors would get drug benefits under conventional Medicare but with

astronomical deductibles -- between $4,500 and $7,500. You'd have to pay that

much money out of pocket before a penny of prescription drug coverage would kick

in. To put that number in perspective, $7,500 is more than a third of the median

income of the typical 70-year-old.

This token drug benefit, plus a very modest discount card that is mainly a

marketing ploy of the drug industry, is expected to fool seniors into believing

that Bush is offering drug coverage under Medicare. But the out-of-pocket

deductibles are so exorbitant that fewer than 10 percent of the elderly would

actually get any reimbursements.

Under Bush's plan, coverage for routine prescription expenses would be available

if you shifted from traditional Medicare to a private HMO, but many other

restrictions would offset the increased drug benefits.

We have been down this road before. In the 1990s, the HMOs thought they could

profit from targeting the senior-citizen market, and Congress hoped to save

money by giving HMOs a shot at managing costs.

HMOs advertised heavily, promoting -- among other benefits -- prescription drug

coverage. They also tried to target healthier segment seniors, using come-ons

such as health clubs (bedridden critically ill people are not attracted to

gyms).

But many of the people who opted for HMOs had the effrontery to get sick. HMOs

turned out to be less efficient than traditional Medicare. So HMOs

unceremoniously dumped millions of money-losing patients. Others, who didn't

like the limits on choice, moved back to traditional Medicare voluntarily.

So the Bush approach to Medicare reform had a full field test, and it flunked.

No wonder Bush needs a war of mass distraction.

Medicare does need reforming, and older people do need prescription drugs. The

Democrats' plan is better: It allocates more federal money, does it via

traditional Medicare, and uses government's buying power to reduce drug costs.

But neither party really wants to tackle Medicare costs, and both have tried to

solve the problem on the cheap by just reducing payments to doctors, hospitals,

and medical education. Once there was plenty of fat to squeeze out, but today

the budget cutters are cutting into bone.

One of the major parties should realize that true Medicare reform can come only

in the context of universal, national health insurance, so that every possible

penny goes to delivery of health care rather than to marketing schemes and

insurance company profits.

Ideological zealots tend to overreach. Bush's bogus Medicare reform could do

useful damage at the ballot box. If he pressures Republicans into backing it,

Democrats will have a fine election issue. But that will be small comfort to

America's retired people, who will find themselves with less choice and higher

out-of-pocket costs if they want decent health care.

 

 

Robert Kuttner's is co-editor of The American Prospect. His column appears

regularly in the Globe.

 

This story ran on page A23 of the Boston Globe on 3/5/2003.

© Copyright 2003 Globe Newspaper Company.

 

 

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