NCPA - National Center for Policy Analysis

Drug Plan Will Result in Rationing and Little Innovation

June 11, 2003

The attempt by President Bush to reform the broken retiree health system is fast becoming a giant new entitlement, opines the Wall Street Journal.

The program is fast going broke, and a prescription drug benefit for seniors was a carrot to bring about reform. But now that it's time to write the actual bill, Republicans are refusing to stand up for the free-market reforms they claim to believe in.

The GOP plans, according to the Journal, do retain the false edifice of reform:

  • In theory, they would create a less-restrictive privately run alternative to Medicare that would operate like the preferred-provider insurance that most workers have and like.
  • There'd be some incentives for seniors to switch to these private plans, since they would address such deficiencies in traditional Medicare as the lack of catastrophic and preventive coverage.
  • Finally, these plans would be overseen by an entirely new office, outside of traditional Medicare's price-controlling bureaucracy.

One of the bad ideas in the Senate draft is so-called competitive bidding, which would actually limit choice, says the Journal.

  • The government would pick only three low bidders to offer the private Medicare option in each area.
  • This is bound to result in unpopular plans heavy on rationing and light on innovation.

These ideas can have no rationale other than helping the Congressional Budget Office produce lower cost estimates that no one believes anyway -- unless the aim is to sabotage the private Medicare options from the start.

Source: Editorial, "The GOP's Medicare Surrender," Wall Street Journal, June 11, 2003.

For text (WSJ subscription required),,SB105528903942968700,00.html


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