Politics And The “Myth” Of Easy Health Care

Most predicted that the new Medicare Part D prescription drug benefit would be the beginning of a creeping entitlement, with even larger costs than the $700-million + already forecast.

Easy bet.

Despite demonstrably lower prescription costs under Part D than from a nationalized market, like Canada’s, the inclination of Democrat politicians and their usual allies is to oppose anything from the Bush administration and to ideologically believe that centralized government control is preferable to the private market.

Opponents of Part D come from some Republicans due to the huge budget impacts or due to “lack of gratitude” from seniors, or from Democrats who won’t settle for less than the mass homogenized mediocrity of Canada and Europe.

Most Americans are caught in the middle, as usual, between politicized extremes. The quest of many for simplicity, for not having to think, will lead them to having less choice and benefits, at greater personal and budgetary costs.

“AARP to Seek a Better Drug Benefit,” the Washington Post reports today.

John Rother, AARP's policy director, said yesterday that the group wants lawmakers to change a rule in the drug program that counts assets, such as a house, in determining which Medicare patients are poor enough to qualify for special low-income subsidies. AARP and many congressional Democrats tried to exclude assets when the law was being written in 2003. Similarly, Rother said, AARP wants to reopen debate over a provision that would have directed health officials to negotiate directly with drug manufacturers over the prices they charge through the program. The law embraced a more market-oriented approach in which drugmakers negotiate prices with insurance plans that sell the drug benefit to patients. AARP exerted heavy influence in the politics that created the program, endorsing the legislation shortly before it passed a bitterly divided Congress. At the time, Rother said the group might want to "build on it in the future."

However, the AARP’s own website in January 2006 points out “Cheaper than Canada? The drug benefit may be the better deal”

…The private plans that provide it have been scrambling to win over customers with good deals for 2006. Many have eliminated deductibles and some offer full coverage in the gap….Nearly all our interviewees would be better off financially, by varying amounts, under a medicare plan – with those using the most drugs potentially reaping the greatest savings over the year.

However, the Canadian mail-order prescription vendors to aged Americans feel confident that they can profit from American seniors,

”They believe there’s a better deal in Canada,” MacCay says. And even if the pharmacies are wrong and the math turns out mostly to favor Medicare, MacKay predicts that “mass confusion” among older Americans having to choose between so many plans will still put Medicare at a disadvantage with Canada. “Simplicity,” he says, “is always on our side.”

The Democrats seek to undermine the Medicare Part D’s private market success further by stripping out the subsidies that encourage private prescription and medical plans to offer greater benefits than the standard government minimum.

I wrote here a long column describing the new Part D, ending: “Its tidal waves of arguments and costs will continue for decades.” My personal position is that this very expensive program is necessary, inevitable, and that its genius is exactly the private market components that the Democrats and AARP seek to dissolve.

In addition, by reducing the link between personal assets from personal costs, Democrats and the AARP seek to undermine self-restraint in prescription usage and budget costs.

Health care politics are highly politicized. Commonly bantered estimates of the number of uninsured are overestimated by “as much as 20%.” (Expired link to Los Angeles Times of April 26, 2005, “Number of Uninsured May Be Overstated, Studies Suggest”)

A 1992 symposium among the founding designers and implementers of Medicare in 1965 agreed:

By the time Medicare was implemented, major interest groups were involved – the AFL-CIO and senior citizen organizations for example – but they worked with us for change rather than filing suits….there has been a sea change – in the climate of litigation, in the experience and knowledgeability of the providers, in the growth of strong advocacy groups on behalf of providers, beneficiaries and the public, and all kinds of other things…We didn’t have very many health policy analysts in the country. We had about half a dozen. We did it all.

Now, everyone is a “health policy analyst,” too often in the service of different agendas than health care! Opponents of Part D will, correctly, argue the inevitability of entitlement creep. Their challenge, however, is to curb and channel it rather than ignore the need for such a program. Americans want Part D, and want reassurance and leadership. If Republicans don't provide it, Democrats will, and the results will be worse.

Medicare has been virtually frozen in an outdated 1965 model of medical care delivery, except for the Republican initiative to add Medicare-HMO's. One of the Medicare founding fathers, in the above symposium, remarked, "The Republicans weren't very powerful" then, and another that, anyway, Republicans thought Medicare "was just too damn liberal." Republicans are now very powerful, and have a responsibility to lead, not cower or retreat or permit the statists (or as one of the Medicare founders referred to himself, "paternalistic")to prevail again.