Fight Isn’t Over Despite Passage Of Medicare Bill

Posted November 26, 2003 at 12:38pm

Do you think that the Medicare fight is over after passage of a drug benefit after years of debate culminating in an all-nighter on the House floor and an attempted filibuster in the Senate? Or, even after President Bush signs it into law? No way.

[IMGCAP(1)]Democrats are convinced they can turn Bush’s victory on Medicare into the domestic equivalent of his “Mission Accomplished” flight-suit landing on the USS Abraham Lincoln at the end of the Iraq war.

They plan a nonstop campaign at the presidential candidate and Congressional level to convince seniors that the GOP drug plan adopted last week is a fraud, worse than no bill at all.

I don’t think it will work, especially with the 35 million-member AARP allying itself with Republicans to defend the plan — and willing to spend millions on new television ads and information handouts to its members.

In fact, I’d guess that the more attention Democrats focus on Medicare — and the more the AARP and Republicans say about it — the more help it will be to Bush and the GOP, who normally trail Democrats badly on health care issues.

The continuing debate may also be useful in informing retirees and their children exactly what’s in the bill and what isn’t.

On the merits, Congress probably should not have passed the bill it did, but rather a less-costly measure that helps only the most needy and those hit by catastrophic drug costs.

The bill is priced at $400 billion over 10 years, but the Congressional Budget Office estimates that in the second 10 years, as more baby boomers retire, the cost will be between $1.3 trillion and $2 trillion.

Already, trustees of the Social Security system estimate that by 2025, Social Security and Medicare will use up all the funds in their own trust accounts and account for 28 percent of all federal income tax revenue. By 2040, it will be almost half.

The children of baby boomers will bear an enormous, perhaps unbearable, tax burden paying the retirement costs of their parents — including those in the top income brackets who could easily pay their own way.

As the always brilliant Newsweek columnist Robert Samuelson pointed out last week, the Medicare bill is a form of pork barrel used by the GOP to buy the votes of seniors, who narrowly supported Democrat Al Gore in 2000. Of course, Democrats would have made it more expensive yet.

Nonetheless, it’s been passed and Bush is delighted to sign it. The question now is: Will the intended beneficiaries be happy with it and vote Republican?

A poll released last week by the University of Pennsylvania’s National Annenberg Election Survey shows that U.S. adults are split almost evenly on whether the drug bill should have been passed, 40 percent to 42 percent.

Among respondents 65 and older, only 33 percent favored the bill and 49 percent opposed it.

However, AARP National Policy Director John Rother said the poll was worded unfairly by identifying the bill as “Republican,” failing to identify “opponents” as Democrats and concluding with the claim that the measure might “eventually destroy Medicare.”

That’s a key argument of Democrats, based on the fact that in 2010 there will be an experiment in six metropolitan areas in which standard Medicare will compete with private insurance plans for seniors’ business.

But that provision is drastically watered down from the original House GOP measure, which called for nationwide competition between Medicare and HMOs. That difference will not be hard for Republicans and the AARP to explain.

Another line of Democratic attack is that the benefit for seniors is too small. Rep. Robert Matsui (Calif.), chairman of the Democratic Congressional Campaign Committee, argues that a person paying $4,000 in drug bills will have to foot $3,000 of them.

Rother acknowledges that that’s so — but that Matsui had selected the $4,000 cleverly to fit within the “doughnut hole,” or benefit gap, created by the fact that $400 billion isn’t enough to pay all of the drug bills run up by U.S. seniors, which total $1.6 trillion.

“Even that benefit is better than nothing,” Rother said. “And, since there’s not enough to do everything for everybody, we felt it’s better to do the most for those who need it most.”

Low-income seniors will get $600 worth of drugs free and have to pay only $1 for each prescription of a generic drug and $3 for a brand-name drug. The government will pay 95 percent of the cost of drugs for those paying more than $3,600 a year.

Democratic pollster Mark Mellman told me that “there are some other lines of attack that are going to be very, very effective. For example, this bill does nothing about controlling drug costs. It forbids reimportation of drugs from overseas and forbids the government from negotiating prices with drug companies.”

Rother said that’s also true and that AARP will work on costs later. But I hope that the GOP will stand firm against price controls — or importing price controls from overseas — which will undermine medical research, as it has done in Europe.

Mellman said that Democrats also will argue that a “cap” on Medicare outlays will eventually force a reduction in benefits, but Rother countered that it takes an act of Congress to enforce the cap.

And, Mellman recalled that in 2000, Bush attacked Gore in campaign ads for proposing a plan that would require seniors to make a “once-in-a-lifetime choice” to be in or out of his Medicare plan. “This plan forces the same choice,” he said.

Not so, according to Rother. The new law will allow late sign-ups for drug insurance but imposes a “delayed enrollment penalty” of 1 percent per month, starting at 35 cents.

Rother said he finds it amusing that Democrats are so hostile to the Medicare bill. “I agree with someone who said that if this same bill had been proposed by Bill Clinton, Democrats would be all for it and Republicans would be against it.”

In fact, he said, Clinton did propose a much less generous measure, covering only 50 percent of a senior’s first $2,000 in outlays. “Democrats were all in favor of that.”

All this back and forth will serve to emphasize: Republicans delivered the goods. That may be what has Democrats so mad.