- The Washington Times - Thursday, January 30, 2003

Here's why neither Medicare reform or prescription drug coverage won't get passed this year: The politicians, lobbyists and pundits that concoct the conventional wisdom think President Bush is only kidding when he talked in the State of the Union address about restructuring Medicare, and will ultimately take the easy way out, tacking on a drug benefit to the existing program before 2004. In fact, he is quite serious and quite determined to change the program and will not be persuaded to do otherwise. Bush sees Medicare's price controls as deadening to health care as a whole and the trillion-dollar deficit as a huge fiscal problem that will grow larger still without incentives to manage the care of the most chronically ill seniors who are also the most expensive to treat.

To this end, the president clearly stated that seniors who want to remain in the current Medicare program can do so, but they will have a choice of several other plans that will also offer drug coverage as do nine million federal workers and tens of millions of other Americans who also suffer from the same chronic illnesses that many Medicare consumers faced. The conventional wisdom was that after the plan was classified as politically risky the White House would cave in and support legislation that would add prescription drugs but leave Medicare with its price controls, its delays in approving new technologies and impending trillion dollar deficit untouched.

But, the as dissenting voices that fill the talk shows and op-ed columns will have to face up to presidential resolve as they failed to do when they tried to turn patient-rights legislation into a Trojan horse for trial attorneys seeking to bankrupt managed care. In that case, the president simply refused to give in and agree to a provision he felt would invite more litigation and less health care. Whatever determination he felt on that issue is of greater magnitude still with respect to Medicare. He does not want to saddle future generations with higher taxes and future debt. According to the Medicare trustees, it will take a 25 percent payroll tax to fund Medicare at its current level in 2030. And, while raising the banner of reform in the context of this problem may not win him votes, it will earn him respect and finally force a rethinking of Medicare's finances. As Robert Samuelson has written, most of official Washington is united in denial over the fact that without significant changes, Medicare will become a welfare program for a generation of baby boomers that will live longer, wealthier and healthier lives than our grandparents. Adding managed-care options to Medicare won't solve the problem, but it will make the problem more solvable.

This new debate alone will make progress on any new initiative unlikely. But there are other concerns as well. The President has a war to wage and win. There are an economy and tax cuts to consider. These are issues that will preoccupy the commander in chief and the nation. The administration is already hammering away on medical malpractice litigation. Where does Medicare reform fit in?

It is certainly not low-lying fruit. Negative reaction about the prospects of the president's plan to reform Medicare has come from so many quarters it has created a false consciousness that a drug benefit is a sure thing. But there is no real coalition behind any one approach. There are nervous Republicans who still believe taking prescription drugs off the table is the key to re-election, but their party's congressional leadership is according to White House sources are committed to pushing Medicare reform at the appropriate time. And Republicans will be hard-put to support legislation introduced by any one of the growing number of would-be presidential contenders.

Even support for a drug benefit is splintered. Democrats and their allies labor unions, AARP and liberal health care policy organizations such as the Commonwealth Fund want a government-run plan. Large corporations simply want the taxpayers to pick up the cost of the retiree drug benefits as soon as possible. Pharmaceutical and biotech firms want to avoid being pounded on the price of their products yet again, but realize that if Medicare controls the price and access of new drugs, it will harm the industry in the long run.

All these interests will push against the president and he will push back. His rhetoric on reform will be matched by both action on behalf of his proposal and resistance against those who would perpetuate the status quo. The first go-round on the issue will result in stalemate this year. But the president will continue to press for change, as he has on private Social Security accounts, medical malpractice litigation reform and lower taxes. He just doesn't want to have a debate on reforming Medicare: he wants to reform it.

The Washington health-care lobbies don't get it. And they won't get a stand-alone drug benefit either.


Robert Goldberg is director of the Manhattan Institute's Center for Medical Progress.E-mail: bobgoldberg@yahoo.com

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