November 19, 2003

The World According to AARP


FoxNews reported yesterday: Lawmakers Work to Wrap Up Medicare Bill.

Enjoying the blessing of the politically influential AARP, President Bush on Monday began the push for one of his top legislative priorities -- providing a prescription drug benefit to America's seniors.

Bush met with lawmakers on the 10-year, $400 billion package of benefits -- the largest expansion of social services in America since the Great Society -- and practically dared negotiators to stop a bill that provides subsidized drug coverage to 40 million elderly Americans.

The Democrats are complaining about the bill, but only because they want it to be even more socialistic. This is what Bush gets for trying to out socialist the Democrats.

Capitalism Magazine has a two recent editorials on the subject that are well worth reading:

The New Medicare Program: A Prescription for Disaster by Richard E. Ralston

Rather than reduce the cost of drugs, like all government medical plans the new program will just add more of the poison that created the disease. Rigid controls and the vast bureaucracies of Medicare and the FDA already add billions of dollars to the cost of drugs. This, not the market place, is responsible for the current high cost of drugs. New government programs and "benefits" will further explode drug costs and result in rationing, restrictions, regulations, less research, and fewer drugs. Adding yet more federal bureaucracy to administer another program will just layer on more expense.

Fewer new drugs will become available as a consequence of these plans. When the government is "surprised" after the escalation in drug costs that result from a plan that promises to pay all of the bills, it will inevitably proceed to price controls and other new restrictions on drug companies

How do these Republican advocates of less government and free markets justify this huge new program? The woefully inadequate fig leaf they provide is the introduction of competition to Medicare from private insurance companies. However such competition will be available temporarily in only six cities during a six year test period beginning seven years from now (2010). What a triumph for Capitalism! Yet Senator Edward Kennedy says it will destroy Medicare. Yea. Sure.

Free-Lunch Medicine by Thomas Sowell

None of the various schemes for lowering the prices of medicines seems willing to face up to the simple fact that each new medicine developed costs hundreds of millions of dollars. This huge inescapable fact seems to just evaporate from the discussion as politicians vie with one another for the best way to make these medicines "affordable" at "reasonable" prices.

Politicians who claim to be able to "bring down the cost of health care" are talking about bringing down the prices charged. But prices are not costs. Prices are what pay for costs.[...]

Government price controls on medicines and medical care simply mean that these costs do not all get covered. This works in the short run -- and the short run is what politicians are interested in, because elections are held in the short run. But the rest of us had better think ahead, if we value our health.

Posted by Forkum at November 19, 2003 07:26 AM