July 15, 2003

July 15, 2003 | Commentary on Health Care

Just Say No to Budget-Busting Entitlement

Rep. Mike Pence, R-Ind., braced for the worst.


His vote against the Medicare legislation in the House of Representatives nearly sunk the bill. Sponsors had to hold the vote open more than an hour to persuade other Republicans to come on board so they could eke out a one-vote victory.


Pence then returned to Indiana's Sixth District over the Fourth of July break to face the music from constituents. He decided to level with them -- to tell them that the proposal in the House to extend a prescription-drug benefit to seniors had a laudable goal but simply wouldn't work. It's too expensive, he told them. It would cause millions of seniors to lose the private drug coverage they now enjoy, and it could lead to socialized medicine. He refused to vote for legislation that his children and their children wouldn't be able to afford.


We can take heart in the reception Rep. Pence received. His constituents had questions, and they were by no means ready to give up on the concept of a drug benefit for seniors. But they understood this is harder than it looks. "I've been impressed with people's acceptance of our position," he told a local newspaper. "No one has said, 'Your vote is wrong.'"


Nevertheless, pressure remains on Congress and the White House to do something about prescription-drug costs for seniors. President Bush originally proposed a system modeled on the popular Federal Employees Health Benefits Program (FEHBP), which serves 9 million people, including members of Congress and their staffs, the White House staff, federal retirees and current employees and their families.


In this system, patients choose an insurance program that meets their needs, and insurers agree to provide a package of core benefits plus others to better suit customer needs in exchange for a shot at this large pool of customers. President Bush originally proposed that the pot be sweetened for seniors who leave Medicare -- a cash-strapped, poorly managed, bureaucratically slowed program unpopular with many medical professionals -- and enter these private plans.


But he's backed off that because he, like Congress, seems convinced that something, anything, must be passed -- and soon.


The federal employees' program may not be perfect, but it gets high marks from virtually all users. There has to be some reason why Congress voted to ensure that members and retired members retain the benefits of FEHBP, not the program it would foist on the American people.


Washington Post columnist Harold Meyerson is correct that major legislation such as this "never has emerged from the melding of fundamental differences." In other words, this is going to have to go one way or the other. Either we'll be strapped with a huge new government entitlement that will devour ever larger percentages of the federal budget, or more members of Congress will take the Pence approach and trust their constituents to understand the need to carefully put together a program that will meet the needs of seniors and not break the financial backs of their children, grandchildren and great-grandchildren.


We can't have seniors eating Purina Cat Chow so they can afford their prescriptions. But that's no reason to do this, as Pence's constituents made plain. Analysts put the cost of the current proposal at $400 billion over 10 years, and into the trillions beyond that. Everyone agrees the program will have to be expanded to meet public demand. It has more holes than Swiss cheese now, and it's not nearly as tasty.


Besides, as I've written before, budgeting means nothing in these situations. Congress proposes to make this an entitlement for every senior. One day, under this plan, janitors will subsidize Bill Gates' drug costs. And the amount of money this benefit will cost -- absent some sensible controls -- is the amount of money the government owes in claims. Once an entitlement becomes law, the taxpayer gets the entire bill, forever and ever, no questions asked.


Today, about one-third of seniors get their prescription-drug coverage through their employers or former employers. And nearly 40 percent of those seniors -- their income levels notwithstanding -- would shift from being covered by reasonably priced private insurance to a government-subsidized program that already is hemorrhaging cash.


Trust the voters. We understand Congress has a delicate balancing act here. Money is short, and the country is demanding an expensive new benefit. At the same time, we can't obligate the next generation -- and the next, and the next -- to programs they didn't vote for and never will be able to afford.


It works. Ask Mike Pence.


Rebecca Hagelin is a vice president of the Heritage Foundation.


Reprinted with permission of Internet newspaper WorldNetDaily

About the Author

Rebecca Hagelin Senior Communications Fellow