President Bush will soon be signing the Medicare prescription drug bill that was recently passed by the Republican-controlled Congress. This legislation will reward the insurance and pharmaceutical industries at the expense of the elderly and disabled. Instead of using the purchasing power of the federal government to push down drug prices, or encouraging reimportation, the law provides for government-subsidized private insurance plans that will likely do nothing to reduce drug prices. Most participants will be disappointed by high premiums and large out-of-pocket costs.
And despite subsidies for employer-provided retiree prescription benefits, many employers will likely be induced to cancel such programs, throwing more retirees into the Medicare plan. So the already-staggering estimated cost of $400 billion over 10 years should increase.
The bill contains provisions aimed at pushing some participants into HMOs and thus has been criticized as a step toward privatizing Medicare. But the reality may be much worse. The long-term solvency of Medicare is already a serious problem. This additional benefit at astronomical cost may be a big step toward ending Medicare.
Many conservative Republicans are ideologically opposed to big-government programs like Medicare. A law that rewards the insurance and pharmaceutical industries and other big-business contributors, while simultaneously impairing the long-term viability of Medicare, would seem like a big success. And the idea that they can use it to garner the votes of unsuspecting senior citizens, while generating more contributions from those businesses, must be a dream come true.
The prescription drug insurance coverage does not begin until 2006. Bush and his fellow Republicans are obviously hoping that seniors and those who care about Medicare won’t understand this new legislation, at least until after the 2004 elections.
