Not the Medicare Modernization Our Country Needs

Conn Carroll / February 15, 2008

Moments ago, President Bush fulfilled his legal obligation under the Medicare Modernization Act of 2003 (MMA) by submitting a Medicare cost containment proposal to Capitol Hill. MMA obligated the president to submit a proposal after the latest Medicare trustee report found that Medicare spending will exceed 45% of total outlays. This was a golden opportunity to take substantive steps to deal with the nation’s long-term entitlement problem, yet the proposal is a bit of a disappointment.

The White House plan consists of a codification of the administration’s “values based purchasing” initiative for medical goods and services and for greater employment of health information technology. It also extends the existing rules for means testing of premiums in Medicare Part B to Medicare Part D, the Medicare drug program. The administration also reiterated its medical liability reform policy. Heritage analyst Bob Moffit said, “Given the magnitude of the entitlement challenge, the administration’s response is a bit of a disappointment. It does not nearly go far enough.” The administration should have:

• Proposed a fundamental change to the budget process to account for the long-term costs of Medicare and other entitlement programs as part of annual budgeting. That way these costs would be considered in the same way as the costs of other government programs, including national defense.
• Proposed that Medicare and the other entitlement programs be put on a level playing field with discretionary programs, and subject to review every five years, with triggers to make automatic adjustments if they exceed the budgeted levels. (more…)