On the Horizon
The New Math in Washington—Enacting a Universal Medicare Drug Benefit that Adds Up
By Robert Hayes, MRC News, Summer 2003
Our business is to help people find ways to get the health care they need.
Day after day we hear the anguish in the voices of elderly men and women who cannot find the means to pay for their medicine. Sometimes we can help, often we cannot.
For aging members of the self-sacrificing Greatest Generation, the worst pain is watching a spouse go without the medication that could alleviate pain, prolong life.
It’s maddening to hear Congress, year after year, bemoan this human crisis and do nothing.
Until President Bush signed his new tax cut bill, it seemed clear that the $400 billion he allocated for a Medicare prescription drug benefit over the next ten years would pay only for a meager benefit for all in need, or a genuine benefit for a small fraction of the 41 million older and disabled Americans who now go without prescribed medication.
But now there is a New Math in Washington. By following the ingenious arithmetic of the Congressional leadership, all people with Medicare could count on a meaningful prescription drug benefit within the $400 billion ceiling set by Congress’s budget resolution.
When Congressional leaders faced opposition from Republican moderates on exceeding a tax cut in excess of $350 billion over ten years, they did not compromise. Instead, the tax cut hawks got more aggressive.
Rather than moderate the tax cuts, they devised a new use of legislative sunset: the cost of capital gains and dividend cuts will be counted over ten years, but will only last until 2009. Large income tax cuts will sunset after 2005.
Honest economists howl foul, and they have a point. But the tax hawks are honest too. They openly admit it’s a cheap gimmick and assert knowingly that no future Congress will have the courage to allow the tax cuts to lapse. As we already hear in the early laps of the 2004 presidential campaign, any candidate who suggests curbing the massive tax cuts of this Bush Administration is immediately denounced for proposing tax increases.
It’s the New Math and it works for America’s millionaires -- one independent analysis said the new tax cuts will save the average millionaire $93,500 in 2003.
The same New Math will work for America’s elderly and disabled men and women. Here’s how.
Take the $400 billion ten year set aside for a Medicare drug benefit. Use it to provide prescription drug coverage for the 41 million Americans on Medicare to give them genuine health security.
That would mean limiting out-of-pocket costs to about 30 percent of the drug costs for most people with Medicare, with added protections for those with low income or catastrophic drug costs. As with traditional Medicare, participation would be voluntary (98 percent signed up this year), and would require payments of premiums, deductibles and coinsurance. But the benefit would be comprehensive, affordable and universal.
Trouble is, this needed benefit would eat up the $400 billion in less than four years. What to do? Congress can build in a sunset, so at the same time the Congress is considering whether to extend the massive tax cuts of 2001 and 2003, it can also consider whether to extend the Medicare drug benefit.
That way we could have a profoundly important public debate over the values that we, as a society, hold most dear.
Do we allow the tax on families with incomes over $300,000 drift back up to 38.6 percent from 35 percent, or do we tell our parents to give up their arthritis and blood pressure medications?
Do we allow capital gains taxes return to 20 percent (the lowest level since 1986), or do we stop covering medication for people with multiple sclerosis?
Or, do we have the robust economy that the tax hawks predict so that these choices need not be made?
Irresponsible? Nothing is more irresponsible than denying our parents and grandparents needed medicine.
In each year of a genuine drug benefit, thousands of lives will be saved, and the quality of life for millions of Americans will be enhanced.
Sure, the New Math is a gimmick. But equity is a two way street.