Skip to main content

'Do no harm?' New Medicare law may be a cure worse than the disease

Date Posted: December 26 2003

By U.S. Rep. John Dingell
Ranking member, Energy and Commerce Committee

When the president signed into law the Medicare bill that barely passed Congress, he performed radical experimental surgery that will cause great long-term harm to one of our nation's most vital health care programs. This new law ends Medicare as we know it, a program that has provided efficient and quality medical care to our nation's seniors and disabled for nearly 40 years.

The most draconian change of all turns Medicare into a voucher program. Known as "premium support" it marks the beginning of the privatization of Medicare with the end goal of giving seniors a set amount of money to pay for health care. When this provision goes into effect in 2010, long after the next election cycle, up to 6.8 million people will be thrown into the world of HMOs and other private insurers, leaving them to fend for themselves.

Before that happens, though, this new law will cause approximately 2-3 million of the 12 million seniors who currently have employer-sponsored retiree coverage to lose that coverage. Millions who would be better off with their former employer's coverage will no longer have it, with most of them likely being herded into HMOs.

As for the long-hailed drug benefit, the law will only provide seniors with mediocre drug coverage. With an average premium of $420 per year and a yearly deductible of $250, the so-called drug benefit will cover a percentage of drug costs up to $2,250. However, for the next $2,850 in costs, there will be no benefit. Zip, zero, nada.

In fact, a Medicare beneficiary who has an annual bill of $3,500 would need to spend $2,475 out-of-pocket to get that $3,500 worth of coverage. That means we are spending billions of dollars to give this beneficiary 30 percent in savings, something that some communities in Michigan are already providing to their seniors in the form of discount cards.

Our nation has tried this prescription for reform before, and it failed. The program was called Medicare Choice, and it was hailed as the answer to seniors who were willing to pay a little more to receive extra benefits, including prescription pharmaceuticals. Unfortunately, the private insurance providers that entered this market soon left because they were not making sufficient profit, leaving thousands of seniors in the lurch. Yet, now, we are going to be throwing more money into the same failed policy.

After all the drastic changes that will take place over the next few years, one reform that would have made sense was conspicuously left out: using market forces to negotiate lower drug prices for those in Medicare program. The bill signed by the president yesterday actually prevents the Medicare program from negotiating lower prices for our seniors the way the Veterans Administration successfully does for veterans.

I presided over the Medicare debate when it originally passed the House and my father was the architect of the program. Our goal was to ensure that seniors could receive quality, affordable medical coverage where and when they needed it. For more than three decades we have kept the promise of Medicare. Enactment of the new law yesterday marked the beginning of the end of that promise. Whatever happened to the first rule of medicine: "Do no harm?"