Subject: Medicare Legislation 2003

Jack Truher
<[email protected]>
December 1, 2003

The question is: who wins, who loses. The question is not: is it a "good" bill or a "bad" bill. That depends on your income, on your need. It depends on your judgements. There is obvious pork, giveaways to the pharmaceutical industry. The bill does a lot of things, other than remodel medicare benefits. It surrenders the right of government to negotiate drug prices on behalf of medicare patients. That's capitulation by government to commercial interests. What else is new?

I watched several hours of the C-SPAN senatorial debates, prior to passage. Opposing democrats tend to argue that "this bill means the end of traditional medicare," and that there is big subsidy to private HMOs.

Traditional medicare is completely inadequate, so standing on that principle is fruitless Each of us can view the recently legislation from our own perspective.

I have been a patient at the non-profit Palo Alto Medical Foundation (PAMF) for nearly 50 years. That's an endorsement. The PAMF is organized as part of the non-profit Sutter provider umbrella organization. The combination of those two enterprises yields a professionally managed health care provider which has linked access to the needed components of Stanford's hospital and medical resources. If I feel I am being neglected (which happens occasionally), there are workarounds. I am insured as part of Stanford's employee group health program, which contracts with a number of HMO for medical and dental insurance.

So I tend to think that encouraging (non-profit) privatization of medical care is a good thing. I don't have any confidence or faith in a completely free-market fee-for-service patient-doctor negotiation. Medical events happen too fast. Referrals needs to be managed within a complex system of prior training and prior escalation process, and by professionals who are carefully chosen by competent means. I have no confidence on unskilled patients seeking out their own solutions to medical issues, including me and my family. Patients have to know how to identify institutional competencies and defer to them.

But if I didn't have experience with the complex network of medical support described above, I might feel differently about all that.

As to the recent legislation, check out the best abbreviated medical care analysis (from Nov 26, 2003) I've seen.

Drug bill a pill that my brain can't stomach

Cynthia Tucker   [ The Atlanta Journal-Constitution: 11/30/03 ]

Certain myths live large in American politics. Black voters are liberal. "Christian" means evangelical or biblical literalist. The elderly struggle to pay for their prescriptions. All are demonstrably false; nevertheless, all are so deeply rooted in political culture that they can't be pulled up or killed off. But it's the last one that will bankrupt your grandchildren.

Even though statistics show that American children, as a group, are poorer than the elderly (who receive Social Security and Medicare), there has been no long-running and noisy campaign to pay for children's prescriptions. Instead, the AARP has managed one of the best public relations scams since the leisure suit, convincing Democrats and, more recently, Republicans that a prescription drug plan should be added to Medicare. It's a complex piece of legislation chock full of giveaways to industry, mostly drug companies.

And it's going to cost plenty. Forget the $400 billion over 10 years that you've been hearing about. Focus on the costs after that. By the time the drug companies finish jacking up their prices, the price tag will be well into the trillions.

By some estimates, the prescription drug benefit will cost $1.5 trillion between 2014 and 2023. The Medicare hospital benefit is already expected to run out of money by 2026, after the baby boom generation has retired.

This bill is so wrongheaded that it's hard to know where to begin.

Lobbied heavily by pharmaceutical companies, which make substantial contributions to political campaigns, the Republican leadership decided not to allow Medicare to use its buying power to negotiate lower prices with drug companies. That borders on insane. It's something that huge private insurers and companies (such as Sam's Club) do every day. But Medicare won't be allowed to do it, virtually guaranteeing that prices for prescriptions drugs -- already high -- will soar into the stratosphere.

Here's another bit of insanity: The bill pays private insurance companies to take elderly patients. You know how one of the tenets of conservative philosophy is that private companies can always deliver a product better and cheaper? So why does the Medicare bill offer billions in subsidies to private insurers to induce them into the market? That's not competition; that's corporate welfare.

Worse yet, the next generation will be stuck with a massive bill for an entitlement that meets no critical need. Many retirees can afford not only their prescriptions but also cruises to Alaska and tours to New England to see the autumn leaves. (Sorry, Mom.) According to recent estimates, 68 percent of seniors spend less than $1,000 per year in out-of-pocket costs for prescriptions. Fifteen percent spend between $1,000 and $2,000.

The other 17 percent have soaring out-of-pocket expenses and may genuinely need help, if they are poor. Congress should have set aside funds to help that small group only. Instead, middle-class retirees get a prescription drug benefit and the poor and sickly, oddly, may be worse off.

A small group of low-income elderly and disabled patients qualify for both Medicare and Medicaid, enabling them to get their prescriptions either free or at very low cost. Under the new bill, many of them will end up paying more for their prescription drugs, according to the Center on Budget and Policy Priorities.

Meanwhile, some 43 million Americans shy of retirement age have no health care coverage at all, not for office visits nor prescription drugs or preventive care such as mammograms. From middle-class professionals who cannot find full-time employment to poor workers shoved from Medicaid rolls by state budget cutbacks, the crisis of the uninsured is getting worse.

So is the nation's debt. Grandpa's prescription bills will be paid by his grandchildren.