- The Washington Times - Wednesday, November 19, 2003

There are many reasons for conservatives to like the Medicare bill now under consideration in Congress, but I’ll give you two: Ted Kennedy’s meltdown on the floor of the Senate minutes after the outline of the bill was released; or read the angry postings on the AARP Web site (organized by the AFL-CIO) calling organization President Bill Novelli a traitor to seniors. The irresponsible feeding of the Medicare entitlement without regard to cost is over and they know it.

Why can’t conservatives see that and try to use this bill as the beginning for something even better? This legislation is not perfect, but it begins to redefine how medical care is financed in America, and its principal focus is truly non-partisan:improving Medicare so that seniors receive better health care through choices of their own.

For the most part, conservative fury and fear about the cost of the drug benefit has blinded them to this sea-change. To be sure, approximately 6 percent of all seniors account for about 30 percent of all drug costs because they are more sick and require more and newer medicines. And this is the fastest growing share of the elderly population. But this cost is shared by drug companies who offer a discount and seniors who pay a deductible and part of the cost of drugs based on income,afirstforthe Medicare plan.

Further, the drug benefit can control Medicare overall spending.Studies showa dollar of new drug spending saves $6 in other medical services. Because the drug program is free ofprice controls and rationing,seniors will receive the best new medicines. That will reduce their reliance onhospitals, emergency rooms and nursing homes.

With the Medicare hospitalization fund poised to go bankrupt in 2036, a healthier senior population is a great investment. Moreover, drug benefits set the stage for making seniors responsible for other aspects of health care spending.For too long, seniors have been able to pay a small co-pay and deductible regardless of income or wealth even though studies show that seniors will have significant disposable income and assets to pay for health care.The drug benefitadjusts premiums on a sliding scale based on seniors’ earnings, an income test that extends to parts of Medicare reform.

There are no hard caps on Medicare spending, and a provision that would have forced Congress to vote on Medicare’s future — if general tax revenues were funding 45 percent of the program — was changed to a presidential request for such legislation. But the legislation has something even better: the first expansion of health savings accounts in nearly a decade. Nothing reduces the appetite for taxes more than allowing people to save and invest their own money.

In the most controversial part of the legislation, private plans will be able to compete for the business of what could potentially be 10 million senior citizens by 2010. There is probably a bit too much government interference in how plans can set prices but the key is this: Plans will compete on cost and quality and seniors can get rebates by choosing cheaper plans. And more important, plans will be paid on a risk-adjusted basis so they wont have an incentive to avoid sicker seniors. Again, seniors that receive better care live longer as well as healthier lives. And that is the only way, along with getting people to invest in their own health,tostabilize Medicare’s financing.

On the liberal side of the ledger, USA Today notes that “Sen. Edward Kennedy, D-Mass., and other critics are denouncing parts of the new plan as a $12 billion slush fund for private insurance companies to lure seniors out of traditional Medicare. But they offer few alternatives other than open-ended spending.”

But conservatives are no better when they claim that an experiment falls far short of real reform, since the time limit dooms the proposal to failure. They forget that in 1996, welfare reform legislation,whichMr. Kennedy also strongly opposed, was offered as a five year experiment requiring re-authorization. What conservatives did was to insure that welfare reform worked and when re-authorization time came, to improve and refine the policy.

In the end, if conservatives are serious about governing they must support a bill they themselves set in motion. To do otherwise is to cede the issue to the liberals. To this end, they must cease the irresponsible threats to vote against the bill if it fails to include a provision forcing the importation of price controlled drugs without any FDA regulation into America. Conservatives who care about the future of Medicare should ensure that seniors have the most freedom to secure the blessings of medical progress without any impediment from government interference or fear of danger from hear or abroad.

Health care coverage for the uninsured looms large in the next election. Passage of a Medicare bill this year provides momentum and meaning for any freedom-focused healthcare message conservatives want to deliver in 2004. To paraphrase Ronald Reagan, there is no left or right on Medicare. It is up or down. Up toward greater choice and individual responsibility or down toward greater government control and endless spending. We finally have a vote on this fundamental issue as it applies to the biggest government program of all time. This is truly a time of choosing, and the choice has never been clearer.

Robert Goldberg is director of the Manhattan Institute’s Center for Medical Progress.

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