Wednesday, February 4, 2004

Here’s a new iron law of American politics. Liberals define compassion solely in terms of how much government spends and only if government spends the money, while conservatives define it in terms of how and whether government gives people the choices and freedom necessary to improve and enrich their lives.

Case in point: The Capitol’s conniption fit over the gap between what the Congressional Budget Office(CBO)thoughtthe Medicare bill would cost compared to what the Medicare program itself estimates the new proposal will cost over the next decade or so. For years, Democrats pounded Republicans for cutting Medicare (or at least the rate of increase in Medicare) spending. Now that the president’s budget suggests that the government could spend substantially more than projected by the CBO ($540 billion over 10 years projected by Medicare budgeteers compared to $400 billion CBO estimates), Democrats are attacking the president for spending too much.

Sen. John Kerry and others are claiming that most, if not all, of the difference can be explained by the Bush administration’s “giveaway” to drug companies. They want the government to negotiate lower drug prices to make up the difference. That’s nonsense. The CBO estimates that the government wouldn’t save seniors or taxpayers any more money than private drug-benefit companies can obtain. That means Mr. Kerry and his compatriots would have to impose the most restrictive and mean-spirited limits on new medicines, along with the most draconian price cuts in the world, to fill the gap. But if you define compassion as government control over medical money, then that’s what you do.

The difference really lies in the estimates of just how many seniors will stay in and sign up for private health plans and leave the existing Medicare plan. According to an Associated Press report, “The administration figures that more than 12 million seniors will get their health care through health maintenance organizations and preferred provider organizations within five years, a threefold increase.” By comparison, the CBO thinks fewer than 3 million seniors will sign up over that time.

It also includes a difference in the estimate of just how many low-income seniors and seniors with drug costs of $3,000 or more will sign up for drug coverage. Medicare officials think more people will sign up than the CBO does.

Understandably, fiscal conservatives are not thrilled with the steady expansion of entitlements. But medical innovation and cost pressures are already making more reform — toward further privatization and greater individual control over health care spending — critically important. The increased use of new drugs will lead to a decline in disability among seniors and lower Medicare costs overall. More immediately, the new benefits — in combination with health savings accounts — offer people the freedom to choose prescription drugs and private plans that provide better benefits or lower prices. You have to offer consumers something better to win them away from the existing Medicare program.

And it is precisely this better choice that is driving liberals crazy. When the bill passed, Sen. Ted Kennedy bellowed, “This mandate is symptomatic of the flaws in the Republican plan. Long before senior citizens see a dime in coverage, the HMOs will get billions of dollars in extra payments.” Actually, the three largest Medicare HMOs in Massachusetts said they would use the money to lower premiums to seniors by about 36 percent and add services.

Democrats like to point out that Medicare spends less on the same services than private health plans. But private health plans have offered richer benefits and newer technologies more quickly than Medicare in a more coordinated form. So, seniors are more likely to get better access to comprehensive care at a lower total cost.

The Bush administration’s higher Medicare estimate signals a possible popular uprising againstgovernment-run Medicare and a movement toward greater choice. The fact that seniors could possibly receive better care at a lower cost is not lost on opponents; they just don’t care. They can’t wait to kill the provision of the new Medicare bill that prohibits the government from interfering with the free market and the doctor-patient relationship about which drug to use. Instead, they want a massive cost- control scheme and a national drug list that would delay and deny the sickest and poorest seniors access to the best medicines, in order to show the drug and biotech firms a thing or two.

Their outrage is a false compassion of a sort, one in which the only measure of caring is how much the government spends and the government controls, regardless of its impact on the lives of people. Lionel Trilling once wrote of his fellow liberals, “Some paradox of our nature leads us, when once we have made our fellow men the objects of our enlightened interest, to go on to make them the objects of our pity, then of our wisdom, ultimately of our coercion.” The continuing attack on Medicare reform is precisely that.

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

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