The Great Republican Rip-Off

By Froma Harrop
TomPaine.com

Tuesday 24 January 2006

Once again, we have mob scenes of citizens begging for direction from their inept federal government. The botched launch of the Medicare drug benefit may not match the muddled response to Katrina in total tragedy, but it is causing trips to emergency rooms. Meanwhile, alarmed state officials are setting up crisis centers to ensure a continued flow of pills to their elderly and disabled populations.

How much more of this can the voters take? The Republicans running Washington are incapable of either designing a rational program or implementing it. And for all their talk of being the party of national security, you wonder how they would handle an unexpected terrorist attack when they can't even organize a drug plan with more than a year's lead time.

Many seniors who signed up for the program are learning that they are nowhere to be found in the government's computers. Pharmacists can't locate the needed billing information to fill prescriptions. And people calling the Medicare hotline face hour-long waits to speak to a human being.

The situation is even more frantic for low-income Medicaid patients, whose drug needs are now supposed to be met by Medicare. Some are being charged $30 for a prescription they're supposed to get for $3.

Usually, a government program that costs far more than necessary at least delivers gold-plated benefits with Swiss efficiency. But the Medicare drug benefits are mediocre. And Washington's performance would be an embarrassment in a Third World country.

The notion that $724 billion should buy a pretty nifty program is based on the pre-Bush assumption that the objective was to help elderly Americans obtain their medications. At this price, you'd expect things to run as smoothly as a Microsoft annual meeting. And the Medicare hotline would be staffed by banks of velvet-voiced experts who answer on the first ring.

But the real mission was to force through another adventure in privatization. The Republicans' idea of a "free market solution" is a government program that lets private companies siphon out billions - and hides the unremarkable level of benefits in the fog of "choice."

When you look at the program from the corporate point of view, it is a model of K Street efficiency: Insurance and drug company lobbyists hire Republicans and fill GOP campaign coffers. In return, they get to write the legislation to their liking. From this perspective, the drug benefit is working like a charm.

The drug companies were able to insert a provision that forbids the federal government to buy drugs in bulk at a negotiated price. And by dividing the purchasing power among hundreds of insurance companies, each with far less clout than the government, they can reap higher prices for their products.

The insurance companies, meanwhile, got their piece of the action. They manage the drug benefits. And because their plans can come with different premiums, deductibles and co-payments - and offer different lists of drugs, which the insurers can change - beneficiaries have no way to effectively compare the options. There's profit in confusion.

Republicans in government did well, too. Rep. Billy Tauzin was the Louisiana Republican who drew up the legislation. Immediately after passage, he left Congress to work for the drug lobbyists. His job at the Pharmaceutical Research and Manufacturers of America pays an estimated $3 million a year. Thomas Scully, Bush's point man on the drug bill, beat Tauzin through the revolving door, and joined a law firm that lobbies for drug companies.

It did not have to be this way. During the 2000 presidential campaign, Democrat Al Gore had proposed a simple drug benefit that would have been delivered by Medicare - and not outsourced to private companies. His estimated a price tag of $253 billion over 10 years drew condemnations from Republican ranks. "Mr. Gore seems unconcerned about costs," the Wall Street Journal sniffed.

To counter the Gore drug-benefit plan, Bush offered voters his privatized version - pulling out of his hat a price tag of $158 billion. When he pushed his plan to Congress in 2003, the number had risen to $400 billion. At the time, a government actuary had determined that the program would cost a lot more than $400 billion, but he shut up after Scully threatened his job. And so taxpayers are now looking at a $724 billion bill.

Note that the corporate players have little incentive to save the taxpayers money. For example, mentally ill people denied their medications are showing in emergency rooms at great expense to the public. But the companies managing their benefits aren't charged a dime for these unnecessary hospitalizations.

Outside of the business interests raking in money, how do Americans feel about the Medicare drug benefit?

Most of the beneficiaries it's supposed to serve are giving the program a wide berth. Fewer than one in five people eligible for the stand-alone program have signed up for it. Some have decided that they can get a better deal through the Veterans Administration or company plans or Canada. Others have just thrown up their hands in frustration over the program's complexity. The post-launch breakdown is certainly not a great advertisement for the folks holding back.

The taxpayers are only now waking up to the rip-off. They've been scammed like rubes at a carnival sideshow. Learning that one has just bought a used Vespa for the price of Porsche is not a nice feeling.

If Americans have any self-esteem left, they are going to express their displeasure at the polls in November. In politics as in business, angry customers usually bring about a change in management.

Froma Harrop is a nationally syndicated columnist.