Friday, May 06, 2005
Krugman on the Bush League's Medicare Drug "Benefit"
Click on the title and read the whole thing - as always Paul Krugman's arguments are quite sound.
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A Serious Drug Problem
By PAUL KRUGMAN
Published: May 6, 2005
...But the real scandal is what's in the legislation. It's an object lesson in how special interests hold America's health care system hostage.
The new Medicare law subsidizes private health plans, which have repeatedly failed to deliver promised cost savings. It creates an unnecessary layer of middlemen by requiring that the drug benefit be administered by private insurers. The biggest giveaway is to Big Pharma: the law specifically prohibits Medicare from using its purchasing power to negotiate lower drug prices.
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Meanwhile, Thomas Scully, the former Medicare administrator - who threatened to fire Medicare's chief actuary if he gave Congress the real numbers on the drug bill's cost - was granted a special waiver from the ethics rules. This allowed him to negotiate for a future health industry lobbying job at the very same time he was pushing the drug bill.
If all this sounds like a story of a corrupt deal created by a corrupt system, it is. And it was a very expensive deal indeed. According to the Medicare trustees, the fiscal gap over the next 75 years created by the 2003 law - not the financing gap for Medicare as a whole, just the additional gap created by legislation passed 18 months ago - will be $8.7 trillion.
That's about three times the amount President Bush proposes to save by cutting middle-class Social Security benefits...
(Source: New York Times)
