Reward not worth risk

November 18, 2003

LAWMAKERS WHO let political expediency determine their vote on the Medicare drug bill are an enviable lot. For them, the choice is easy.

President Bush needs Republicans to help him boast in next year's elections that he delivered on the top demand of a key voter group. Democrats can't afford to let the GOP rob one of their key issues.

Far more difficult is the policy judgment on whether the sweeping structural changes proposed for Medicare offer enough promise to be worth the risk of harming the enormously popular program. From details so far available, it appears they do not.

This legislation, developed over many months of negotiation, has much to recommend it. In many areas, it represents a genuine compromise between those who want to shield taxpayers from explosive growth in Medicare spending and those trying to protect the aging population Medicare serves.

Most notably, a proposed competition between private insurance plans and Medicare's traditional fee-for-service program has been reduced to a small experiment. For the first time, Medicare premiums will be assessed according to income, but those at the low end will get significant new help at little or no cost, particularly from the added drug benefit. And a whopping $88 billion has been offered as a sweetener to employers to encourage them to continue offering drug benefits to retirees.

The drug coverage to be provided at an average premium of $35 per month is too skimpy, but worth accepting to establish a base upon which to build.

What tips the balance the other way is that the legislation is more about shifting medical costs to beneficiaries than actually reining costs in. Particularly on pharmaceuticals, the lawmakers missed a huge opportunity to use Medicare's buying power to leverage more than minimal discounts.

Instead, the Medicare measure represents a win-win-win for the drug lobby: Use of their products would increase, prices would be negotiated individually by private plans serving only regional areas, and reimportation of U.S.-made drugs from Canada would continue to be blocked, despite overwhelming support in Congress.

As part of the bargain requiring the affluent elderly to pay for a greater share of their medical care, the government should be using its power to make sure they get the best possible deal. This isn't about the rich, or even just about the elderly; it's about taking steps toward better managing the cost of health care for everyone.

Democrats warn that, if adopted, the GOP-plan would mean the end of "Medicare as we know it." But that's the whole point. The Great Society program is woefully outdated and inefficient. It pays too much for some services, too little for others. Doctors are increasingly turning away Medicare patients unless they pay extra.

Medicare already consumes 13 percent of federal spending, and its share is expected to balloon after the baby boomers start retiring in 2011. That could create huge distortions in a budget already deeply in the red.

So, Medicare as we know it must change. Some cost-shifting to beneficiaries is inevitable. But in this bill, government doesn't hold up its end of the bargain to make sure the costs are reasonable.

Negotiators should go back to the table.

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