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Monday, March 4, 2024

GOP won’t touch Medicare drug plan

Comptroller General David Walker. (AP Photo/Dennis Cook)

Republicans want to pull the plug on the health care overhaul they call “Obamacare,” blaming it in part for the United States’ ballooning budget deficit.

But they’re quiet when it comes to the Medicare drug benefit — another massive health care entitlement, with unfunded future costs over $7 trillion.

Arguably, it could be driving up the deficit more than President Barack Obama‘s ambitious health care plan is.

But when the Republican presidential candidates were asked last week asked if they would repeal the Medicare drug benefit, they said no way. After all, Republicans created it.

Debt and deficit are the focus of the Republican Party as the 2012 presidential campaign moves through the nominating process and looks ahead to the general election. Yet the reluctance of GOP candidates to renounce a costly entitlement program that voters like shows how politics can come into play when critiquing the federal ledger.

Passed by a GOP-led Congress in 2003 under President George W. Bush, the prescription program is immensely popular with older people, faithful voters who lately have been trending Republican.

Medicare recipients pay only one-fourth of the cost of the drug benefit. Because there’s no dedicated tax to support the program, the other three-fourths comes from the government’s general fund. That’s the same leaky pot used for defense, law enforcement, education and other priorities. It’s regularly refilled with borrowed dollars that balloon the deficit.

Although the health care law costs far more than the drug benefit, it’s paid for, at least on paper. It includes unpopular Medicare cuts as well as tax increases on insurers, drug and medical device companies, upper-income people, and even indoor tanning devotees.

Asked last week at the tea party debate if they would repeal the prescription program, GOP candidates would hear nothing of it.

Texas Gov. Rick Perry said he would not, even though he said he’s concerned about its cost. Cracking down on waste and fraud might be the answer, he suggested.

“I wouldn’t repeal it,” said former Massachusetts Gov. Mitt Romney. He said he would restructure Medicare, but not for those now in the program or nearing retirement. The re-engineering supported by House Republicans this year and praised by Romney at the time would give future retirees a voucher-like payment to buy insurance from a range of private plans.

Texas Rep. Ron Paul noted that he’d voted against the prescription benefit, but said repeal “sure wouldn’t be on my high list. I would find a lot of cuts (in) a lot of other places.”

Budget hawks scoff.

“I’m an equal opportunity critic here,” said David Walker, a former head of the congressional watchdog agency. “I think the Republicans were irresponsible for passing the Medicare prescription program in 2003 and I think the Democrats were irresponsible for passing” Obama’s health overhaul.

As comptroller general of the Government Accountability Office for most of the past decade, Walker used his position to call attention to the nation’s long-term budget problems at a time when the debt wasn’t front-page news. He now leads the Comeback America Initiative, a nonpartisan group promoting fiscal responsibility.

“There was no attempt to offset the cost of the Medicare prescription bill,” Walker said. “It’s fair to say that at least there was an attempt to pay” for the health law through a mix of spending cuts and tax increases.

How big is the hole left by the prescription program? Over the next 75 years, its $7.5 trillion “unfunded obligation” exceeds the $6.7 trillion gap attributable to Social Security.

“When they were designing the new health care law, the experience of the Medicare prescription bill was very much in their minds,” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group advocating fiscal discipline. “They didn’t want to have another unfunded expansion.”

Experts can debate whether future Congresses will suspend Obama’s Medicare cuts and whether the long-range cost of extending coverage to more than 30 million uninsured will outpace the revenue to pay for it.

As the reactions of the GOP candidates at the debate demonstrated, no one is seriously considering repeal of the prescription program.

Thanks to taxpayers, about 90 percent of older people now have affordable access to medications that help keep them out of the hospital. Roughly two-thirds of those are enrolled in Medicare’s benefit; many others are in former employers’ prescription plans.

Ironically, repealing Obama’s overhaul would take away the most important improvement to the program since it was created. Obama’s law gradually eliminates the dreaded coverage gap known as the doughnut hole. Millions of people will each save thousands of dollars as a result.

Republicans like to point out that the cost of the prescription program is well below original estimates. They attribute that to competition among the private insurers providing the benefit.

While competition is part of the story, experts say it’s not the only reason. The shift to cheaper generic drugs among people of all ages has been a powerful contributor. That may not last forever. The trustees who oversee Medicare’s finances warn in their latest report that spending on drugs will rise more rapidly in the future.

Said Walker: “Basically what’s happening is we’re mortgaging the future of our children and grandchildren, and borrowing the money from China.”



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