May 10, 2004

May 10, 2004 | WebMemo on Health Care

Bitter Pills #7: The "Early Warning" That Lawmakers Will Likely Ignore

What's the point of having an "early warning system" if folks aren't likely to heed it?

Ask lawmakers on Capitol Hill. In approving a Medicare drug entitlement last fall, they installed a fiscal "early warning system" intended to alert them when the retirement of millions of baby boomers makes the Great Society program take up too much of the federal budget.

This wasn't a bad idea: The drug entitlement alone will cost at least $400 billion over the next 10 years. The trouble is, as health care expert Joseph Antos notes in a paper for The Heritage Foundation, the warning will be useless unless Congress acts on it. And that's not likely. "The effectiveness of such a system is only as good as the willingness of policy-makers to take what could be unpopular actions to limit Medicare spending," he writes.
Antos has a better idea: Revisit the Medicare prescription-drug program and keep costs down by adopting a payment system similar to the government's own health program. You can read Antos' paper here:

Fixing the New Medicare Law # 2: Promote Real Cost Containment  (April 26, 2004).

For more information or to receive an e-mail version of "Bitter Pills," contact chris.kennedy@heritage.org or call Heritage Media Services at (202) 675-1761.

"Bitter Pills" is an occasional, but regular, feature from The Heritage Foundation on how the 2003 Medicare drug law is full of sickening "surprises" that have serious consequences for seniors and taxpayers. Of course, The Heritage Foundation isn't surprised at all. We diagnosed the problems long ago in our Medicare Maladies series. Both Medicare Maladies and Bitter Pills are available on heritage.org (if you can stomach them).

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