Tuesday, June 8, 2004

Last summer, Congress added a long-overdue prescription drug benefit to Medicare. Although the benefit is a huge expansion of government (the 10-year price tag is around $534 billion), traditionally the conclusive seal of approval for a good liberal, House and Senate Democrats are up in arms. In an effort to pull the rug out from under the program right from the beginning, Democratic Rep. Nancy Pelosi has encouraged seniors not to accept prescription drug cards. Rep. Fortney “Pete” Stark heartily agrees, saying that the cards provide “maximum confusion and minimal savings.” But the primary target of Democratic ire is the bill’s watered-down competitive bidding provision, which will force traditional Medicare to compete directly with private plans in a six-city pilot program beginning in 2010.

The competitive bidding program, if made permanent, will help control the already enormous unfunded liabilities that an expanded Medicare will generate in the coming years, and thankfully so. Absent any changes, when the baby boomers begin to retire in 2010, Medicare’s costs would begin to balloon out of control. Current tax receipts wouldn’t be able to stomach the difference, and it’s conceivable that President Bush’s tax cuts would be repealed. But by allowing seniors to choose between private plans and traditional Medicare, the pilot program will promote efficiency and variety. Instead of being herded bureaucratically into a single, uniform government drug plan, seniors will be able to select the plan, government-run or private, that best fits their needs. In terms of cost, the efficiency produced by competition will help slash prices. In short, the pilot program will be beneficial for seniors and a breath of fresh air for the already overburdened American taxpayer.

Not surprisingly, potential tax increases don’t seem to concern Senate Minority Leader Tom Daschle, who along with several other Democrats in the House and the Senate, has introduced legislation to exempt his state from the pilot program. Tarring and feathering the program as a “Medicare-privatization experiment,” Democratic leaders hope to discredit and eventually kill the idea. Their chances of success seem remote, but Republicans in Congress should be sure to stand guard.

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