06/23/2002

REPUBLICANS WANT RETIREES to know that their Medicare drug plan would offer them choice. Rather than accept a "one-size-fits-all solution" put forth by big-government Democrats, Medicare beneficiaries could comb the bounty of choices set out by the private sector. That's what GOP leaders say should happen.

It won't. As often is the case, a one-size-fits-all deal may be better than any of the choices.

The elderly, by definition, have been around a while. And so the word "choice" must be giving them fainting spells. They can recall previous efforts to inject marketplace magic into the Medicare behemoth by bringing in HMOs. That program was called "Medicare+Choice." When insurance companies found they couldn't make money on it, they dropped their elderly patients by the hundreds of thousands. Under the Republican plan, history would repeat itself.

Let me say that I harbor mixed emotions on the whole idea of extending drug benefits to Medicare beneficiaries. There's no doubt that prescription drugs have become both very expensive and a bigger part of health-care spending. Any really good health-insurance plan includes coverage for medications. And I fully believe that our elderly must be able to afford health care.

Thing is, every American should have a right to health care. As long as 40 million of our people, most of them working, lack even a thread of health coverage, rushing another layer of comfort to Medicare beneficiaries is somehow unseemly. The uninsured should come first.

Of course, they won't -- and the reason is politics. The elderly vote in droves. The dimmest memories will recall that the centerpiece of the 2000 presidential election was Medicare drug benefits. To candidates Bush and Gore, this was the biggest issue confronting the American nation. Every update of an earlier position came out with news-bulletin urgency.

The Gore proposal was far more realistic, frankly, because it called for spending more money. Bush envisioned a starring role for private insurers, which, he insisted, would keep down costs. Being vague, the Bush plan let imaginations run wild.

No matter. Once the voting ended, the issue of Medicare drug benefits didn't even rate a back burner. It was kept barely warm on a hot plate in another room.

Well, midterm elections are approaching, and it's time once again to talk about Medicare drug benefits. The Republican House plan would spend $310 billion over 10 years. House Democrats want to spend far more -- $800 billion. Their drug benefit would be folded into the existing Medicare program.

Under the Republican plan, the money would go to insurance companies that offer drug coverage. GOP House leaders say the elderly could "choose" whatever private plan best fit their needs.

Two major drawbacks here. One is that after the first $2,000 in drug expenses, patients are totally on their own until prescription costs reach $4,500. That's better than nothing, but hardly comprehensive coverage for people whose annual drug needs can go well beyond these numbers.

The other drawback is bigger. The insurance companies don't want to do it. It's easy to see why. The folks who spend the most on drugs will make a bee-line for the plan that offers the sweetest benefits. Companies that charged premiums based on the drug costs of the average beneficiary would soon be out of business.

The House Republican plan must have insurance companies breaking into cold sweats. They can recall the bitter anger when HMOs bailed out of Medicare.

The pharmaceutical industry, on the other hand, is quite enthusiastic. That's because it doesn't force down the astronomical prices drug makers charge Americans for their product.

Things could be a lot worse for them. Two years ago, President Clinton sensibly suggested that the federal government buy drugs in bulk on behalf of Medicare beneficiaries and bargain for lower prices. The departments of Defense and Veterans Affairs already do this. The drug companies suffered a nervous breakdown at the very idea.

In a just world, the uninsured would stand next in line to receive government subsidies for health care -- not the elderly, many of whom are quite comfy. But if we're going to offer a car, even to a relatively privileged segment of the population, it might as well have a motor.

Froma Harrop is a Journal editorial writer and syndicated columnist. She may be reached by e-mail at: fharrop@projo.com.