- The Washington Times - Tuesday, December 17, 2002

Since fighting the Clinton health plan in 1993, Republicans have been largely bereft of any real conviction about medical coverage. Rather, the Republican position can best be characterized including the expansion of Medicaid and the creation of the State Children's Health Insurance Program as Ted Kennedy with half the calories. The president is set to lead congressional Republicans in a much different direction giving Americans the money and tax breaks to choose their own health care and preserve their relationship with the doctors and hospitals they trust.
Democrats will update their version of the Fear Factor (people who are sick, dying or dead without health care coverage) and offer Americans the opportunity to get medical coverage through Medicaid through mandates and higher taxes.
Indeed, the health care issue has never been so usefully defined for the public (or for Republicans and centrist Democrats) in quite some time. The Democrat proposal shaped largely by its liberal wing with the help of Families USA bumps up against the state Medicaid programs already facing large deficits and comprising the largest portion of state budgets.
There are already 37 million adults and children served by Medicaid each year and Democrats want to add 40 million more. The idea of having nearly half of all Americans in government-run health programs (if you include 35 million seniors receiving Medicare) might excite Families USA and others, but its unlikely that states will want to take on Medicaid recipients without funding. Medicaid spending is increasing at twice the rate of overall state government spending.
The Democrats will respond with higher taxes mandates that will require companies to either cover workers or pay into Medicaid. The other "choice" will be "allowing" the uninsured to buy into Medicaid with their own money or federal subsidies or a combination. But states are already planning ways to scale back Medicaid to save money including limits on who is eligible, cuts in doctors' fees, restrictions on important new drugs, and slashing services to disabled children and the mentally ill.
Unlike people with private health insurance, Medicaid recipients have to fight with other interests for scarce public dollars. Indeed, over the years, Medicaid has become a Hobbesian form of health care, particularly for the mentally ill and children. As Medicaid and the state run CHIP program have become the insurer of first resort, it has crowded out appropriate public care for the poor and disabled, placing inordinate demands on the public treasury best served by the private sector. Now real and ugly rationing is taking place at the very moment when Democrats want to shove Americans into these programs.
The right response is to make a wide range of health care plans more affordable and available, not to prop up Medicaid or scapegoat the usual suspect, the drug industry. It will only be a matter of time before Democrats start blaming Medicaid's woes on rising drug costs, ignoring the fact that they are only 9 percent of federal Medicaid costs and 12 percent of total Medicaid program spending even as they help control the rise in hospitalization.
But poor political habits are hard to break, even within the administration. Tom Scully, the director of Center for Medicare and Medicaid Services, has all but handed the Democrats their talking points by telling hospital executives that the way for states to control Medicaid spending is to take on the drug companies. "Not many states have the courage to take this on," Mr. Scully said. "I love the drug companies, but I think it's insane (for Medicaid) to charge a $1 to $3 co-payment to buy Celebrex and Vioxx … . Celebrex and Vioxx are no better than Motrin. It's a joke."
What's a joke is that the bleeding ulcers and stomach problems associated with long-term Motrin use is one of the primary reasons the elderly were admitted to the hospital and, Mr. Scully doesn't know it. It's also a joke that he doesn't realize that many of the "courageous" actions states are using to control drug spending such as limiting access to old drugs for schizophrenia is actually driving up total Medicaid expenditures. Mr. Scully's words and ignorance will come back to hurt Republicans as they seek to wage and win a principled fight on health care.
Medicaid is falling apart because it is a government-run health plan not because of prescription drug costs. The sooner Republicans stick to that message the better it will be for Americans in search of better health care.

Robert Goldberg is a senior fellow and director of the Center for Medical Progress at the Manhattan Institute for Policy Research.

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