Medicare: belly up or double down?

The scary news out of DC last week was from the Medicare Board of Trustees, whose 2004 Annual Report predicted that the middle-class health insurance benefit for retirees and others would go belly-up by 2019. Ellen Beck of UPI did a nice job of analyzing the dire predictions, which are less dire than the Administration would like to have you believe. Paul Krugman of the N.Y. Times added a political perspective on why the Administration is pushing the insolvency button:

The trustees' report does, however, give one more reason to hate the prescription drug bill the administration rammed through Congress last year. If deception, intimidation, abuse of power and giveaways to drug companies aren't enough, it turns out that the bill also squanders taxpayer money on H.M.O.'s. . . .

But whether because of ideology or because of H.M.O. campaign contributions, the people now running the country refuse to learn that lesson. As part of last year's prescription drug bill, they tried again, offering an even bigger subsidy to private plans.

And that turns out to be an important reason for the deterioration in Medicare's prospects: of the seven years lopped off the life of the trust fund, two are the result of increased subsidies mandated by last year's law, mainly in the form of higher payments to H.M.O.'s.

So what did we learn this week? Social Security is in decent shape. Medicare has problems, but ill-conceived "reform" has only made those problems worse. And let's rip up that awful prescription drug bill and start over.

I hate to say 'I told you so,' but the consistent line from this blogger since last July has been that the R_x benefit was too expensive and not a sufficient benefit to those who need the help with their medications. Subsequent analysis and news have borne this out: (1) the true cost of the bill was intentionally underestimated by 25 percent and (2) the true beneficiaries of the bill are the pharmaceutical companies and the HMOs.

When (and how) will the Administration's chicaneries catch up to Dubya? Time will tell . . . . Speaking of chicaneries, check out this report: "United States House of Representatives, Committee on Government Reform -- Minority Staff Special Investigations Division (March 16, 2004): Iraq on the Record -- The Bush Administration's Public Statements on Iraq, prepared for Rep. Henry A. Waxman."