Since 06-08-05
Defusing the Medicare Time Bomb
Since 06-08-05
From:
Waspscpo@aol.com [mailto:Waspscpo@aol.com]
Sent: Wednesday, June 08, 2005 12:57 PM
To: undisclosed-recipients
Subject: Defusing the Medicare Time Bomb
http://www.heritage.org/Press/Commentary/ed052605d.cfm
Defusing the Medicare Time Bomb
by Robert E. Moffit, Ph.D. and Andrew Grossman
May 26, 2005
Newly hatched deficit hawks in Congress publicly sweat at the thought of
supporting personal accounts for Social Security. But they overlook the
big-ticket elephant in the entitlement-spending room. As Washington Post
columnist Robert J. Samuelson recently noted, when Congress approved
a drug entitlement for Medicare, it approved the largest single spending
increase since the Great Society, complete with massive deficit financing.
Lawmakers’ desperate desire to look the other way is somewhat understandable.
After 2003’s two-semester push to pass a Medicare bill, most in Congress want to
pretend they’re done and never have to crack that textbook again.
But the bad news, which is becoming clearer every day, may leave them no choice.
Medicare’s trustees now say that the program is in the hole by $29.7 trillion.
This represents unfunded Medicare benefits promised to current and future
retirees. It’s no great surprise that members of Congress don’t want to discuss
whether and how, precisely, they will sock young taxpayers with this big bill.
The latest Medicare trustees’ report shows that the long-term cost of Medicare’s
unfunded promises jumped roughly $2 trillion in just one year. Indeed, the debt
for the drug benefit alone jumped from $8.1 trillion to $8.7 trillion. So, in
just one year, the long-term estimates of the drug entitlement increased a
whopping $600 billion. At this rate, even before the benefit is in place,
imagine what that number will be next year!
For now, Congress has turned its back on this mounting problem. If worse comes
to worst, today’s 20-somethings, who pay even less attention to entitlement
costs than do members of Congress, will foot the big bills tomorrow.
Some lawmakers, however, see the Medicare drug benefit for what it is: a ticking
time bomb set to wreak havoc on the budget and shoot future tax rates sky-high.
But even among them, there seems to be only one adult, Rep. Jeff Flake (R-Ariz.),
who recognizes that the Medicare problem is not just a matter of dollars, but
major health-care policy.
Flake sees the problem as more fundamental. He knows that tinkering around the
edges of the drug benefit -- say, by letting the government “negotiate” (i.e.,
“fix”) drug prices -- won’t fill much of Medicare’s long-term fiscal hole and
that it’s dangerous to boot. What’s needed instead is a return to the drawing
board. And Flake has already sketched out a plan.
Flake’s Medicare Prescription Drug COST Containment Act has three interlocking
parts, but it can be explained in one easy sentence: Put off the hideously
expensive and complicated drug benefit until Congress can figure out a way to
pay for it. Flake’s bill would 1) delay the drug benefit for one year, 2) extend
the new Medicare prescription drug-discount card program, which was slow to take
off but has proven effective at channeling aid to those who need it most, and 3)
maintain funding for seniors today receiving coverage through Medicaid who would
have been dropped into the new program.
So far, co-sponsors for the legislation are few, but that could change
overnight. The federal and state bureaucracies have high hurdles to jump if
they’re going to be ready by Jan. 1, when the drug benefit is set to go into
effect. Already, some large companies are beginning to notify their retirees to
get ready to be dumped into the federal program, which provides poorer coverage
in almost every case.
And word of the dreaded “doughnut hole” (a large gap in coverage that would
leave many seniors with high drug bills unprotected) is starting to spread
beyond Washington to seniors, who don’t like the idea one bit. Members of
Congress may soon find themselves searching frantically for a way out. If so,
Flake’s solution should meet their pressing needs.
More lawmakers need to wake up to the true cost of their irresponsible
handiwork. A year’s delay could give them the chance to avoid this mess, study
the issue calmly, and -- this time -- get it right. Flake’s got the right idea.
Robert Moffit is director of the director of the Center for Health Policy
Studies at the Heritage Foundation, where Andrew Grossman is senior Web editor.
Distributed nationally on the Knight-Ridder Tribune wire
--------------------------------------------------------------------
Contributed,
YNCS Don Harribine, USN(ret)