Medicare Mistakes

WSJ.com – Medicare Moment of Truth
Have I recommended lately that my readers subscribe to the Wall Street Journal? I pull from their articles constantly — hopefully not in violation of copyright — and they are excellent.

Not much to say about this other than it appears the Republicans are in the process of screwing up an already bad idea. They’re adopting price controls by another name in a system, Medicare, that is already losing doctors due to low payouts. They’re also missing an opportunity for reform, which President Bush promised as a condition for supporting a prescription drug benefit.

Please rethink this before it comes out of conference.

Congress’s Medicare conferees are toiling away in private, but our information is that Republicans may be on the verge of a historic mistake. They are preparing to make the classic green-eyeshade blunder of putting cost “savings” above genuine reform.

This is an especially odd position for Republicans to take considering that simply providing a prescription drug benefit to seniors will add trillions of dollars in new liabilities to the federal fisc. If the GOP is going to add the largest new entitlement in decades, the least it can do is use that political carrot to purchase a real competitive alternative to Medicare. Instead, we hear they are ready to accept the kind of regulation that will attract Democratic votes but could kill reform before it even has a chance.

The model for reform isn’t some leap in the dark but already works for federal employees and has been touted by President Bush himself. The Federal Employees Health Benefits Program lets government workers choose each year from a variety of insurance plans offered by private companies. The feds pay each employee a percentage of the weighted average of the cost of all plans on offer. If the worker wants more expensive coverage, he or she makes up the difference out of pocket.

There’s no reason Medicare couldn’t work the same way for seniors. The private plans could integrate the drug benefit into a total insurance package, and over time competition and private-sector ingenuity would control costs — all without the price controls that are slowly ruining the current Medicare system.

It’s not my cherished MSAs, but it is a model that is proven to work and will ultimately create more of a market in health care.

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