Medicare Deform

Published January 1, 2003

Attempts by politicians and bureaucrats to offer prescription drugs to Medicare enrollees has taken on the look of “A Nightmare on Elm Street,” or maybe more correctly, Pennsylvania Avenue. Whatever you call it, it’s becoming a bad horror show.

In 1999, President Clinton proposed adding prescription drugs to Medicare as a universal entitlement and ran into the same problems faced by legislators today.

Problem One: If a universal entitlement becomes law, employers have powerful incentives to dump millions of retirees from their privately funded drug plans. Just like the Clinton plan, politicians are proposing expensive taxpayer-supported subsidies to keep employers from dropping retiree benefits.

Problem Two: A Capitol Hill committee working on the 2003 Medicare drug provisions is considering paying employers 28 percent of drug costs incurred by their retirees with prescription drug benefits as one way to discourage dumping seniors onto the government entitlement plan.

Take a deep breath and calculate the cost of this bribe. Twenty-eight percent of the millions of dollars employees currently pay for drug benefits will become a recurring taxpayers nightmare added to the 10-year projected cost of $400 billion for Medicare reform.

Problem Three: Once this entitlement is in place, it won’t be enough, and every year Congress will have to ask for more taxpayer money.

This horror show deserves all thumbs down.

IT’S YOUR HEALTH is written by Conrad Meier, senior fellow in health policy at The Heartland Institute. This program is produced as a public service by Radio America. Meier passed away unexpectedly on March 18, 2005.