A poison pill for Medicare

It was bad enough that the version passed by the Senate this summer mandated that the drug benefit be administered by private prescription management companies. These firms do obtain discounts from drug manufacturers, but they lack the buying power of the federal government to get the lowest prices. The bill reported out of conference affirms the primacy of prescription managers.

This would have been a barely acceptable trade-off to obtain an urgently needed drug benefit. But the conferees went too far when they adopted the House approach, which would use the drug benefit to prod older Americans into private health plans for all their benefits. Privatization would start out small -- in six metropolitan areas in 2010. But the House bill would increase the rate of reimbursement to health plans and contains $12 billion in start-up incentives to entice private plans to offer coverage in the six areas.

If the plans were able to undercut Medicare on costs, the premiums for people in the traditional program would rise. Higher premiums could encourage the healthiest elderly to desert regular Medicare for the health plans, leaving the sickest people behind to pay ever higher amounts for medical care.

Many House Republicans wanted a more sweeping privatization program. Tommy G. Thompson, President Bush's secretary of health and human services, reassured them at a press conference Tuesday that "the ingredients for making changes in the future are there." This experiment needs to be stopped before the Republicans in Congress damage a program that has served the elderly well for 38 years.

The AARP, the largest US organization for the elderly, supports the bill on the grounds that "it's the best deal we can get," according to the organization's policy director, John Rother. The drug benefit would save money for many AARP members, and the bill contains a provision for improved preventive services. But it is also the first volley in a long-run campaign to change Medicare to a managed care system.

With the baby boom generation beginning to retire, the nation needs a thorough debate about the quality of Medicare coverage. This bill would tilt that discussion in favor of a program that would benefit private pharmacy managers and private health plans at the expense of the nationwide choice that has been a pillar of Medicare since its inception.