Facebook Twitter



QUESTION: CONGRESS IS grappling with curbing Medicare and Medicaid costs. Republicans want to end guaranteed benefits to the poor, elderly and disabled under Medicaid and charge seniors more for Medicare or coerce them to join managed care programs. Democrats - offering no defined alternative - call the Republican plan "cataclysmic." Who is right?

ERBE: As is inevitably the case in our current hyperbolic, pugilistic form of national politics, each side is both right and wrong.Republicans are justified in wanting to reform the system and cut costs. But driven as they now are by right-wing extremists, Republicans are characteristically going overboard.

Democrats are likewise habitually too concerned about the plight of the poor and elderly, to the detriment of those who pay most current taxes and keep society moving forward.

Somewhere in what Gen. Colin Powell has named "the sensible center" lies the honest solution.

Republicans want to slow the growth of Medicare ($270 billion worth over seven years) by increasing premiums for beneficiaries and luring old people into managed care programs. Republicans' relatively minor proposed increases in premiums make sense and should be adopted.

But Republican forecasts of how many people would respond to government "incentives" to join managed care programs are seriously flawed. They are erroneously based on recent trends in the private sector. Most corporate workers who have moved to managed care had no alternative: their employers coerced them to switch from fee-for-service to managed care.

Republicans, in order to cajole the elderly lobby, have promised that Medicare beneficiaries will have the costly choice of remaining in fee-for-service plans or moving to HMO's. This promise, in and of itself, dooms their savings projections to oblivion.

Further, Republicans' true motivation in cutting health-care costs is not only to balance the budget (a worthy goal) but simultaneously to cut taxes for the upper classes - a fatuous goal at a time when Americans can ill afford it.

HART: I'm afraid my colleague has been listening to too many Democratic commercials on this issue. The GOP plan does not force folks into anything, HMO or otherwise. It gives each Medicare recipient a "share" of Medicare dollars each year - about $5,000 - and lets them decide what to do with it.

But this plan would fully cover catastrophic illness, which Medicare does not. Most elderly today are paying for extra insurance - at a cost of about $1,200 a year - to cover that gap, which under this plan they would no longer need. If the recipient doesn't use up his MSA, at the end of each year he gets to keep part of his remaining balance.

What an incentive to shop around among different doctors, avoid unnecessary and duplicative tests and not use medical care that isn't necessary. Sounds like the competitive marketplace that is every other sector of the American economy!

Recipients could use their "share" to buy into an HMO. Or those who might be uninsurable can stay in the current system. But all beneficiaries would be better off. And, costs would be cut.