Tuesday, November 25, 2003

Prescription Drug Plan
Well, Congress has passed it and obviously Bush will sign it. My guaranteed, take it to the bank, lock-of-the-day is that this will end up costing more than the projected $400 billion in the first 10 years. The silver lining is that the plan will introduce competition for Medicare patients from private health plans, which may eventually lead towards privatizing Medicare. Sen Kennedy's vigorous opposition suggests that there is some value to the plan, but I'm afraid Robert Samuelson's analysis will turn out to be right. He wrote:

Medicare has become pork barrel. It plays to retirees' desires and raises their discretionary income. The question of generational justice is nearly absent. Who cares about the long-term budget outlook or about clueless younger workers?

What's been missed was an opportunity to strike a grand bargain: some sort of drug benefit in exchange for cost-saving changes in retirement programs (gradual increases in eligibility ages, some benefit cuts for wealthier retirees, measures to curb Medicare spending). Although retirees deserve protection against crushing drug bills, future workers also deserve protection against crushing tax burdens. But that bargain was nowhere in sight because it requires more political candor and courage than either party can summon.

He also has some disturbing numbers:
A government survey found that 4.2% of Medicare recipients reported troubles getting prescritions. 4.2%! And "can't afford medicine" is only a subset of the 4.2% who have "troubles."
The CBO estimates that the second ten years of the plan will cost $1.2 to $2 trillion dollars.
The cost of basic Medicare and Medicaid, without the new plan, will increase 80% by 2030, costing $700 billion per year (ie $7 trillion per decade).

Someone please shoot this pig right between the eyes.

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