Ezra Klein: Republican Corruption Comes Home to Roost

Ezra Klein paints the big drug benefit picture:

TPMCafe || Corruption Matters: The 2003 Medicare Modernization Act was a dual purpose bill... yank the prescription drug issue away from Democrats... [demanded by the] pharmaceutical industry.... The legislation passed on November 22, 2003, right around dawn. The vote was held open an unprecedented three hours to ensure passage (by contrast, when Democratic leaders held a vote open for 15 extra minutes in 1987, then-congressman Dick Cheney called it "the most arrogant, heavy-handed abuse of power I've ever seen in the 10 years that I've been here."), a lawmaker was bribed, and the arm-twisting reached such epic proportions that staffers still find severed limbs beneath desks annd behind podiums.

If you're interested in a full recounting of the night, the story is best told in Bob Cusack's definitive article, "The Night the Clocks, Scoreboard Stood Still."

For the lockstep Republican Conference of 2003 to prove so fussy and reluctant requires a truly monstrous bill, and the MMA did not disappoint. A normal drug benefit would, as Kate said, simply tack on prescription coverage to Medicare Part B, paying a portion of pharmaceutical costs as part of the outpatient benefits. Medicare could then use its massive size and market share to bargain down drug prices, ensuring affordability and long-term savings over the fractured, smaller private system. But the two losers in that equation -- private insurers and pharmaceutical companies -- were the two with access to Congress, and so the bill takes precisely the opposite approach, choosing to involve and enrich the affected industries rather than achieve savings, comprehensive coverage, or simplicity.

Medicare Part D, first, cherishes the unique contribution HMO's and private insurers make to our medical landscape, and sought from the beginning to ensure their inclusion. Thus, there is no Medicare insurance here, as there is in parts A and B. Medicare is instead a middleman and absent-minded regulator of the private, for-profit insurers who actually offer the coverage. There are, literally, hundreds of plans, each covering different drugs, offering different copays, boasting different donut holes, and suited for different conditions.

Letting a thousand insurance plans bloom might be well and good were health static, but since seniors routinely attract new ailments and require new drugs, the chance that a necessary treatment won't be covered under the Medicare sub-plans has kept all but the poorest and most needy from risking entry into the drug benefit. Add in the total confusion created by the benefit's structure and you can see why seniors are so anxious to sign up.

Worse, the Medicare Modernization Act specifically prohibited Medicare from bargaining with pharmaceutical companies. That's why the tiny Veteran's Health Administration has been able to demand prices 49 percent lower than Medicare's and why every other country with nationalized health insurance buys pharmaceuticals at around half our price....

The Medicare Modernization Act was the K Street Project in action. How karmically appropriate, then, that its inevitably disastrous implementation should fall mere days after Jack Abramoff's guilty plea. The bill is a mess of bad policy and industry giveaways, and even once the initial administrative hitches calm, the prices will remain exorbitant, the benefit will remain labyrinthine, and the stories of seniors falling ill only to find their plan lacks coverage for their treatment will remain common. Policy matters, bad policy most of all, and if progressives are looking for tangible proof that political corruption has come at a cost to ordinary Americans, they need only ask their grandparents.