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Jewish World Review June 24, 2003 / 24 Sivan, 5763

Quin Hillyer

Quin Hillyer
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Consumer Reports

This drug bill could cause fiscal illnesses

The following ran as an official editorial in the Mobile Register | Republican senators ought to defy their party's leadership by voting against the Medicare prescription drug bill now rampaging through the Senate.

It's an awful bill.

At least five good arguments can be made against the plan as passed by the Senate Finance Committee.

1) Complexity: Remember the incomprehensible organizational chart that Sen. Bob Dole used to help defeat Hillary Clinton's mammoth health care plan in 1994? This Senate bill would require a chart nearly as complicated.

Even ignoring the nightmarish regulatory structure, the basics of the benefits package are truly odd. It provides 50 percent of drug costs between $276 and $4,500 per year, then none of the costs up to $5,800, and then 90 percent of costs above that.

Robert Reischauer, president of the Urban Institute, aptly said that the benefit "has a bizarre structure ... that exists nowhere in the private sector or in nature."

2) Expense: Official estimates are that the new program would cost $400 billion over the next 10 years. Most observers think those are low-ball assumptions.

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Meanwhile, Sen. Ted Kennedy, the leading Democratic supporter of the bill, has promised his fellow Democrats that the program is merely a "solid down payment" on an even bigger, more expensive program. Moreover, those 10-year estimates are misleading because the costs will grow almost exponentially after 10 years, when the biggest bulk of the baby boom generation retires.

3) Loss of competition: By providing a government drug benefit for all seniors, not just for the 24 percent who have no drug coverage now -- but with such substantial regulatory hurdles and government oversight that most private plans may choose not to bother with it -- this program could actually drive private insurers out of the senior market altogether. The result would be not more choices for seniors, but fewer.

4) Loss of doctors and pharma cists: The scariest trend in Medicare right now is a doctors' revolt, which already has cut the proportion (nationwide) of doctors who accept all Medicare patients from 76.4 percent in 1999 to 70.1 percent last year.

That trend is accelerating. Already, Medicare patients in eight states say they have serious trouble finding willing doctors.

The cause is simple: Medicare repeatedly has cut the amount it reimburses doctors -- by an average of 5.4 percent last year, with further reductions scheduled through 2007.

The bill under consideration could eventually require bureaucratic cost controls for prescription drugs as well. That in turn might force community pharmacies to close their doors, especially in rural America.

5) Barrier to reform: Originally, the provision of prescription drugs was intended to be included as part of much broader structural changes in the Medicare system. But as The Economist magazine correctly opined from Great Britain, "Nothing could be more irresponsible that expanding one of the United States' biggest entitlement programs without trying to introduce structural reform."

We concur. Prescription drugs should be used as a popular lure for broader reforms. Meanwhile, this prescription for Medicare is a disaster in the making.

JWR contributor Quin Hillyer is an editorial writer for the Mobile Register. Comment by clicking here.


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