12 January 2007

Medicare Tales

The American Prospect offers Robert Reich's view on the D’s new bill on the Medicare Drug benefit. He says it has no teeth. Democrats have been burned so many times by the Republicans false populism that they’re scared to design sustainable, realistic programs.

Republicans have promoted an entitlement culture in which we think we shouldn’t pay taxes but we should get good stuff from the government. This corporate welfare has gone on for a long time, but seniors also indulge in feeling entitled, as do farmers, politicized churches and plenty of others. Pick your favorite group to rail against.

The Dem’s bill would require Medicare to negotiate for the best price from pharmaceuticals. However, it doesn’t give Medicare authority to drop drugs from their formulary, or approved list of drugs.

“This is like Wal-Mart telling its suppliers ‘we’re going to use our bargaining clout to get from you the lowest prices for our customers -- but regardless of what price you offer we'll still carry your product in our stores,’” Reich writes.

He points out that Medicare could easily do this without eliminating any particular drug from a senior’s choice of options by simply allowing private insurers to compete with its plan. Seniors could buy their heavily marketed and overpriced drug of choice from the private insurers.

Paul Krugman gets borderline TOO wonky for my brain with his column on the history of HMOs and Medicare at Smirking Chimp. He begins in the 1990s, when Medicare began allowing recipients to replace traditional Medicare with private managed-care plans, where the government pays a fee to the HMO.

So instead of paying doctors and hospitals, the government pays the HMO, which was supposed to save the government money. Except that the HMOs started gate-keeping, and only accepting healthy patients. Medicare caught on, and began adjusting its payments. And HMOs began dropping out.

“That should have been the end of the story,” writes Krugman. “But for the Bush administration and its Congressional allies, privatization isn’t a way to deliver better government services — it’s an end in itself.”

And now the plans are heavily subsidized. The rest of the piece minces the concept of the magic of the free market bringing down costs.

I think that works with cell phones, though.

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