January 4, 2005 | WebMemo on Health Care
Congress has designed a complex and increasingly expensive drug benefit scheduled to start in 2006. Worse, the Medicare bureaucracy, with little or no experience in drug benefits, is charged with administering it. Nonetheless, Medicare officials will soon unveil a massive regulatory regime governing more than half of the prescription drugs sold in the United States.
Instead of saddling unwary American taxpayers with trillions of dollars in additional debt, Congress can delay implementation of the drug entitlement until it can explain how it intends to pay for it. Meanwhile, Congress can target more generous subsidies directly to the minority of seniors who are without drug coverage using the existing Medicare drug discount card. This would benefit the needy and taxpayers alike. It would also correct the stunningly irresponsible entitlement policy that Congress adopted in 2003.
The congressional drug program deepens the financial crisis threatening Medicare. It adds more than $8 trillion to Medicare's unfunded liabilities, bringing the total to $28 trillion. As the editors of The Washington Post recently observed, "The administration initially sought to link moves to constrain Medicare costs with the prescription drug benefit, but the legislation ended up with a super-sized new benefit and slimmed-down cost containment measures that mostly take effect-if they work-years down the road."
In her April 8, 2004, testimony before the Senate Governmental Affairs Committee, former Medicare Administrator Gail Wilensky said that "The Medicare Prescription Drug Bill, known as the Medicare Modernization Act (MMA), represents the largest, most expensive and most complicated set of changes to the Medicare program since its inception."
The clock is ticking: On October 1, 2005, Medicare's beneficiary education program begins; on November 1, 2005, the initial enrollment of Medicare beneficiaries begins; and on January 1, 2006, the Medicare drug program must be up and running. In the meantime, Medicare regulators must soon tackle big tasks in their final rules. To name just a few:
Medicare officials will soon finalize a mammoth regulatory regime for the implementation of Congress's drug program. This will reignite the bitter Medicare debate, increase the volume of complaints to Congress, increase the pressure for even more congressional micromanagement, and accelerate the imposition of price controls on prescription drugs.
None of this is necessary. Roughly three out of four seniors today have drug coverage. The new congressional drug benefit will crowd out existing drug coverage for millions of senior citizens.
Instead of disrupting the lives of millions of seniors, Congress can delay this process. And in the meantime, Congress can tell American taxpayers how precisely they will pay for the new drug entitlement, while still targeting generous federal subsidies to the minority of seniors without drug coverage, using the recently created Medicare discount drug card.
It's still not too late for a strong dose of common sense and fiscal responsibility.
Robert E. Moffit, Ph.D., is Director of the Center for Health Policy Studies at The Heritage Foundation.
 The Centers for Medicare and Medicaid Services(CMS) published the proposed drug rules on August 3, 2004.
 "The Bigger Problem," The Washington Post, December 27, 2004, p. A28.
 Gail Wilensky, "Does CMS Have the Right Prescription? Implementing the Medicare Prescription Drug Program," Statement to the Senate Committee on Governmental Affairs, April 8, 2004.
 Nancy DeParle, "Does CMS Have the Right Prescription? Implementing the Medicare Prescription Drug Program," Statement to the Senate Committee on Governmental Affairs, April 8, 2004.
 Robert Pear, "Medicare Law Is Seen Leading to Cuts in Drug Benefits for Retirees," The New York Times, July 14, 2004.