Selling Out Medicare

By: Thomas Oliphant

For those who enjoy contortionist acts, President Bush has one for the ages on Medicare this week.

Out on the road the President will appear the apostle of bipartisanship, repeating his handlers' most poll-tested phrases to market more choices, security, reform, and "a strengthened Medicare system". Back here, he will be undermining a bipartisan idea that actually fulfills the goals his puppeteers have him "embracing".

While Bush was having his picture taken in Europe and the Middle East, those in government who work more diligently were putting in hours to figure out a fair way of including at least some coverage for exorbitant prescription drug prices within an updated Medicare system.

The basic principle embraced by those who did the work - primarily Senate Finance Committee chairman Charles Grassley, an Iowa Republican, and ranking Democrat Max Baucus of Montana - is that choices for senior citizens should be fair and equal as far as basic benefits are concerned and that access to some kind of coverage should be guaranteed regardless of where somebody lives.

Bush-style conservatism is not the free market, competitive kind, however. It is big-contributor favoritism, the kind insiders in Washington love. The President remains committed, even as Bush was regurgitating his buzzword bromides, to a Medicare proposal designed to favor the health insurance racket and to herd senior citizens into insurance schemes they would not embrace if choice and a free market were Bush values.

The Grassley-Baucus deal attempts to make the best use of $400 billion over 10 years. That's what remains for prescription drug coverage for seniors after the nation's priorities have been warped to accommodate huge income tax cuts for rich people.

The principles that unite them as the finance panel begins drafting a bill this week are topped by the notion that the coverage and benefits should be the same whether a person chooses the basic Medicare system that 90% of seniors currently choose or enrollment in a health maintenance organization. Linked to that is the equally important notion that low-income seniors who are enrolled in Medicaid should continue to be able to obtain health and drug coverage and additional aid to the states should be provided to maintain that option.

There is a third principle to assure true choice and competition on a level playing field: Seniors should continue to be able to supplement basic Medicare for hospital and physician care with policies through former employers and so-called Medigap policies, just as they can today.

Behind these principles is an important point, namely, that in the 10 regions of the country set up to administer drug coverage, there must be at least two private plans offered to seniors or the government should step in to provide the service.

President Bush has never supported any of those principles and will try to flout them by mobilizing his rubber-stamp allies in the House. Bush favors a modified privatization of Medicare in which the drug benefits under the current system would be far more stingy than those coming from private insurance companies. The idea is to herd seniors into the tender embrace of companies whose record in serving the elderly has been a national disgrace; in recent years supplemental coverage for seniors has been dropped all over the country because the companies claimed they weren't raking in enough profits.

The cover story, naturally, is that Bush wants to use the government to guarantee as huge a market as possible for the private companies because he believes their magic will save money - a point his Medicare-Medicaid administrator, Thomas Scully, was still peddling after the Grassley-Baucus idea was unveiled.

He makes an interesting argument about alleged efficiencies, but the political fact that matters is that only the Bush people make it. The counter-point, which the Congressional Budget Office is about to make, is that Medicare, as a single-payer system, has administrative costs as much as five times lower than those in the duplicative private sector.

Indeed, Bush uses the language of Grassley-Baucus dishonestly to sell its mirror image for that very reason.

The progress in the Senate is in marked contrast to the gridlock of recent years, but it could all still fall apart, especially if its cost turns out to be more than $400 billion and it gets pinched by critics of the left and right. For now, the left's conscience, Senator Edward Kennedy, calls it a major breakthrough.

The quickest route to another breakdown, however, are the Bush principles of inequality and government favoritism. The fight has only just begun.