Fattening Medicare

The following post appeared in the Huffington Post:

A key part of Speaker Pelosi's 100-hour agenda, Medicare Part D, didn't even begin to address the problems with this program. 

To start with, this so called prescription drug "benefit" is not much a benefit at all. It's actually catastrophic insurance. For example, my Grandma Jean spends nearly $4,000 before her Part D plan really kicks in. 

The entitlement includes a doughnut-hole (coverage gap) so big that Homer Simpson couldn't even finish it.

Second, with over 1,500 different plans nationwide, sixty-six in our state of Pennsylvania, choosing the right one was a daunting experience. Seniors are asked to make a complex decision based on the probability that their medication needs may change. Once you pick a plan the law prohibits you from changing until November of each year. Some benefit. 

Now, I don't mind helping grandparents and seniors pay for pharmaceuticals. Access to medication is a crucial component in today's health care system and prescription drugs reduce the need for even more expensive health care.

My problem is putting the bill on the nation's credit card for future generations. Medicare Part D adds $8 trillion to the nation's long-term debt according to the Government Accountability Office. It's the largest entitlement expansion since 1965 and on the cusp of boomers becoming entitlement eligible. (Talk about a heavy burden on the shoulders of young people.)

Congress must find a new tax source for this unfunded obligation. The House floor debate should be entitlement solvency and fiscal responsibility.

As we recall, Medicare Part D was President Bush's attempt to appeal to low to middle income seniors who vote Democratic and complain about drug costs, while giving government programs a free-market twist.

During a speech at the London School of Economics, the U.S. Comptroller General said, "it may be one of the most poorly designed, inefficiently implemented, and fiscally irresponsible government programs of all time."

Looking back, Medicare and medication costs are not a new issue. 

President Johnson created the Task Force on Prescription Drugs to blunt the demand for drug coverage under Medicare. Years later when President Reagan proposed The Medicare Catastrophic Coverage Act of 1988 (MCCA), Congressional Democrats and AARP, allowed its passage on the condition Medicare begin covering drug costs. Reagan countered saying this new benefit must be budget neutral (similar to pay as you go, another principal of the 100 hours.)

Since there wasn't a tax increase, the program required self-financing from a supplemental premium for higher income seniors. Consequently, one third of the beneficiaries paid for more than two-thirds of the program. This inched Medicare from a universal program towards a means-tested one and the benefit was repealed in 1989.

Lost in Congress's debate about Part D is the solvency and sustainability of entitlement programs in a baby boomer era. It's an unprecedented problem requiring tough, immediate, and politically unpopular choices.

Americans are familiar with Social Security's future because of President Bush's privatization tour and the Democratic push-back. But Medicare, not Social Security, is where urgency lies. By 2030, Medicare spending will increase 331 percent (with Social Security and GDP increasing 147 and 72 percent respectively) and is expected to exceed Social Security spending. 

Living longer has its costs. Jean, 88 and active, is looking at 100.

The Congressional Budget Office predicts that drug spending for the aged will rise from $95 billion in 2004, to $284 billion in 2013.

One reason for this is the obesity epidemic. Obesity has roughly the same association with chronic health conditions as does twenty years' aging; exceeding the problems of cigarettes or alcohol (both taxed). Health Affairs details that obesity is associated with a 36 percent increase in inpatient and outpatient spending, but a 77 percent increase in medication. 

Congress should consider a tax on fat to directly fund Medicare Part D and enhance the benefit from catastrophic insurance to a comprehensive one. 

Since a fat tax economically disadvantages communities with limited healthy options, a portion should be re-invested to break our addiction to fats. This could mean subsidizing healthy foods to building grocery markets or a new school gym.

Even though the extra-value meal saves change at the counter, it's costing America trillions down the road. A fat tax will address one root cause of high medication use, obesity, and one of its root causes, an unhealthy environment.

Throughout 2006 campaigns we constantly heard Democrats espousing "a prescription drug benefit for seniors, not pharmaceutical companies." 

For Grandma Jean's physical health, and my generation's fiscal health, let's have a benefit that's comprehensive and off the credit card.

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