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Paul Krugman on Medicare D

by Paul Krugman Tuesday, May. 16, 2006 at 2:36 PM

The Bush administration turns out to be the reverse Midas, everything it gets its hands on from reconstruction of New Orleans to drug reform turns to crud.

New York Times

May 15, 2006


D for Debacle


Today is the last day to sign up for Medicare Part D, the

prescription drug benefit. It appears that millions of Americans,

confused by the array of competing plans or simply unaware of the

cutoff date, will miss the deadline. This will leave them without

drug coverage for the rest of the year, and subject to financial

penalties for the rest of their lives.

President Bush refuses to extend the sign-up period. "Deadlines," he

said last week, "help people understand there's finality, and people

need to get after it, you know?" His real objection to extending the

deadline is probably that this would be an implicit admission that

his administration botched the program's start-up. And Mr. Bush

never, ever admits mistakes.

But Part D's bad start isn't just another illustration of the

administration's trademark incompetence. It's also an object lesson

in what happens when the government is run by people who aren't

interested in the business of governing.

Before we get there, let's talk for a moment about the problems older

Americans have encountered over the past few months.

Even Mr. Bush has acknowledged that signing up for the program is a

confusing process. But, he says, "there is plenty of help for you."

Yeah, right.

There's a number that people needing help with Part D can call. But

when the program first went into effect, there were only 300 customer

service representatives standing by. (Remember, there are 43 million

Medicare recipients.)

There are now 7,500 representatives, making it easier to reach

someone. But should you believe what you're told? Maybe not. A survey

by the Government Accountability Office found that when Medicare

recipients asked for help in determining which plan would cover their

medications at the lowest cost, they were given the right answer only

41 percent of the time.

Clearly, nobody in the Bush administration took responsibility for

making Part D's start-up work. But then you can say the same thing

about the whole program.

After all, prescription drug coverage didn't have to be bafflingly

complex. Drug coverage could simply have been added to traditional

Medicare. If the government had done that, everyone currently covered

by Medicare would automatically have been enrolled in the drug benefit.

Adding drug coverage as part of ordinary Medicare would also have

saved a lot of money, both by eliminating the cost of employing

private insurance companies as middlemen and by allowing the

government to negotiate lower drug prices. This would have made it

possible to offer a better benefit at much less cost to taxpayers.

But while a straightforward addition of drug coverage to Medicare

would have been good policy, it would have been bad politics from the

point of view of conservatives, who want to privatize traditional

social insurance programs, not make them better.

Moreover, administration officials and their allies in Congress had

both political and personal incentives not to do anything that might

reduce the profits of insurance and drug companies. Both the

insurance industry and, especially, the pharmaceutical industry are

major campaign contributors. And soon after the drug bill was passed,

the congressman and the administration official most responsible for

drafting the legislation both left public service to become lobbyists.

So what we got was a drug program set up to serve the

administration's friends and its political agenda, not the alleged

beneficiaries. Instead of providing drug coverage directly, Part D is

a complex system of subsidies to private insurance companies. The

administration's insistence on running the program through these

companies, which provide little if any additional value beyond what

Medicare could easily have provided directly, is what makes the whole

thing so complicated. And that complication, combined with an obvious

lack of interest in making the system work, is what led to the

disastrous start-up.

All of this is, alas, terribly familiar. As John DiIulio, the former

head of Mr. Bush's faith-based initiative, told Esquire, "What you've

got is everything — and I mean everything — being run by the

political arm." Ideology and cronyism take complete precedence over

the business of governing.

And that's why when it comes to actual policy as opposed to politics,

the Bush administration has turned out to have the reverse Midas

touch. Everything it gets its hands on, from the reconstruction of

Iraq to the rescue of New Orleans, from the drug benefit to the

reform of the C.I.A., turns to crud.

Copyright 2006 The New York Times Company


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