23 Jul 2003 Congress: If You Legislate Changes in Medicare in Haste, You May Repent at Leisure

Ed Haislmaier, who serves on our board of directors (and who has just written two pieces for us on drug reimportation, which can be accessed here and here), testified before U. S. House Subcommittee on Human Rights & Wellness of the Committee on Government Reform on July 17 on Medicare prescription drug benefits.

Ed’s warning to Congress: If you stick with either the House or Senate Medicare prescription drug bills, seniors won’t thank you. In fact, Congress may face a potent “retiree backlash” once America’s senior citizens are forced to start living under the legislation.

Or, as Ed put it in another venue, Deroy Murdock’s National Review Online column cited directly below, “the drug benefit is going to be like a rotting carcass in the middle of the table come Election Day.”

I’ve excerpted just a little bit of Ed’s testimony here, but he’s written a paper for The Heritage Foundation that goes into all of this in much more detail. I recommend it.

Notwithstanding the politically appealing and superficial rhetoric of universal drug coverage, it is the quality of the policy that will determine its reception among seniors and taxpayers alike. Based on the details of the Senate and House drug provisions, and the incentives and dynamics they are certain to set in motion, it is likely that a significant number of retirees will not be thanking their representatives for the new Medicare drug entitlement. Now, as in 1988, the danger for Congress is that if it legislates in haste, it could end up repenting at leisure.

If Congress wants to avoid the kind of retiree backlash that occurred in response to the 1988 Medicare Catastrophic Coverage Act, it should scrap the drug provisions in both the House and Senate bills and go back to the 1999 recommendations of the majority of the membership of the National Bipartisan Commission on the Future of Medicare and provide Medicare beneficiaries with a choice between the traditional Medicare program as it exists today and new, private plans offering comprehensive, integrated benefits including outpatient prescription drug coverage.

The goal of true Medicare reform is to help tomorrow’s retirees escape the growing problems that beset the current Medicare program, problems that are rooted in the absence of integrated, quality care. Congress should instead give retirees the option of choosing between the existing Medicare system and a set of new, private plans, with comprehensive drug coverage, subsidized by the government.

Only by covering outpatient prescription drugs through an integrated, flexible package of privately delivered health care benefits can Medicare in fact realize the tremendous potential of modern pharmaceuticals to both reduce other health care costs and to improve the quality of health outcomes and the lives of America’s current and future retirees.