Drug benefit boomerang

Back in 1985, the Coca-Cola Co. made a major mistake. It decided to get rid of its classic cola drink and replace it with something sweeter called New Coke. The company had extensively market-tested the new product and was convinced it would lead to higher sales. But when consumers found they would lose the Coke they had loved for 100 years, there was a vast outcry and the company was forced to dump New Coke and bring back the old formula.

Republicans have made a similar mistake in adding a prescription drug benefit to Medicare. They looked at polls showing strong support for a Medicare drug benefit and concluded enacting such a program would make them more popular. But as the Coca-Cola Co. discovered, people may tell market researchers one thing, but when confronted with a new reality they can quickly change their minds.

So far, the data all not only show Republicans have reaped no political benefit from the Medicare expansion but are losing support because of it. Ironically, those who will benefit directly from the new drug subsidies, the elderly, are most hostile. In the process, Republicans have thrown away whatever credibility they had for fiscal responsibility and are now actively opposed by many conservatives disgusted by their budgetary profligacy.

A Kaiser Family Foundation poll in April shows only 28 percent support overall for the prescription drug plan, with just 24 percent of those over age 65 approving. A Gallup poll in March shows support for the prescription drug bill falling from 52 percent in December to 41 percent among all Americans, and from 46 percent to 36 percent among those over 65. Even a majority of members of AARP, which strongly supported the new law, oppose it.

A December Gallup poll shows why support is falling. Among the elderly, 73 percent thought the new program wouldn’t go far enough in helping them pay for prescription drugs. In other words, the elderly were guaranteed to be disappointed by the drug program no matter how much it cost. Unless it gave them 100 percent of whatever drugs they wanted for free, they would think they could have done better. And, of course, the Democrats have been very vocal in telling them a Democratic program would have been better.

The prescription drug discount cards, which the administration rushed to give the elderly some tangible benefit before the election have also proved a bust. According to a study by the Kaiser Family Foundation, seniors find them confusing and insufficient for their needs. Adding to dismay about the prescription drug legislation, drug prices continue rising rapidly, eroding the value of discounts from the drug cards. According to AARP, prices for drugs frequently used by seniors have risen faster since the new law took effect in any previous period.

Finally, the administration has suffered from the strong-arm tactics it used to ram the drug legislation through Congress. A recent study by Common Cause details these tactics, including an attempt to bribe Rep. Nick Smith, Michigan Republican, censoring C-SPAN cameras during the vote, and withholding critical information about the cost of the program.

This last point was investigated by the inspector general of the Department of Health and Human Services, who confirmed that career department staffers were threatened with disciplinary action if they disclosed to Congress that the drug bill would cost $134 billion more than it thought. As the Wall Street Journal noted, it is “undeniable” the Medicare bill would not have passed had the higher cost estimate been known.

Consequently, Republicans are now starting to realize — as Coca-Cola did — that they messed up big time. As columnist Robert Novak reports, “Senior administration officials privately admit that last year’s prescription drug bill was a disaster substantively and politically.”

It is here where we really see the difference between the public sector and the private sector. When Coca-Cola executives realized they made a big mistake, they switched gears, brought back Classic Coke and eventually deep-sixed New Coke. They had no choice in a competitive market. But government officials never admit error. So Republicans seem intent on slogging the benefits of a new drug benefit that will cost trillions of dollars for people who don’t like it.

But there may be hope. According to the National Journal, Democrats in Congress promise to “repeal and replace” the drug plan next year. It notes this wasdone in 1988 after Congress passed a catastrophic health coverage bill that seniors rebelled against. If Republicans are smart, they will take Democrats up on their offer and kill the drug bill before it becomes cemented in place for all time.

Bruce Bartlett is senior fellow with the National Center for Policy Analysis and a nationally syndicated columnist.