Soaring Drug Plan Popularity Not Just Old News

Posted: Apr 14, 2006 10:19 AM

WASHINGTON -- Just when it seemed everything was turning sour for President Bush, according to the polls, a large and influential voting bloc is giving one of his chief domestic reforms surprisingly high marks.

For months, stories about Bush's Medicare prescription drug program were uniformly negative: Seniors found the sign-up process too confusing, few were applying for the program, and the cost savings, if any, were minimal at best.

But now the story is that scores have signed up, 29 million at last count, and a large percentage of seniors say they are saving a great deal on the drugs they purchase through the discount program.

Contrary to those network news reports about the difficulty in applying for the program (apparently they could not find anyone who liked it), the latest Washington Post/ABC News poll found that 74 percent of all seniors said they had "an easy time" signing up, compared to only 24 percent who said that it was too confusing.

As for all those reports suggesting that the discount savings were small to nonexistent, this poll found just the opposite. A sizeable 63 percent said they were saving "a lot" or "some," compared to 26 percent who said their drugs were just as expensive.

But perhaps the most authoritative poll of them all is the one conducted by the AARP, the politically powerful senior-issues lobby that backed the prescription-drug reforms during its passage in 2003. The AARP poll, released last week, reported that 78 percent of seniors who have signed up for the benefits were happy with its results. Only 20 percent voiced their disapproval.

That's pretty impressive by any standard, strongly suggesting that the early gloom-and-doom stories about the program's problems were premature.

Those stories reminded me of the early news reports about the airline deregulation program that began under President Jimmy Carter and was pushed through Congress by an unholy alliance of liberals, who included Sen. Ted Kennedy of Massachusetts, and free-market conservatives who wanted to open up the industry to more competition.

But as the deregulatory reforms were getting under way, the big three news networks began running a litany of stories similarly reporting how confusing it all was and how airline passengers were getting ripped off.

The classic wrong-headed story at the time was aired on CBS News, which was introduced by anchorman Dan Rather this way: "What price airline deregulation? Meredith Viera takes a look at the confusion it has caused."

Her story told of airline passengers suddenly being faced with a lot of different fares from competing airlines, often on the same routes. To her, it was "all so confusing," as the story told of one man who paid more for a flight, before he found another passenger who got a cheaper fare from a competitor.

Of course, this was nothing but old-fashioned price-cutting competition, as the government-run, single-set pricing system was being junked in favor of market reforms that freed airlines (within parameters) to set their prices without seeking the approval of the Civil Aeronautics Board, which was abolished.

This healthy but sometimes messy competition led to a revolution in super-saver fares that opened up air travel to millions of ordinary, lower-income Americans.

The enactment of tax-deferred or tax-free Individual Retirement Accounts seemed confusing, too, at first, as banks offered a multiplicity of plans and inducements and interest rates. But the industry adjusted, and tens of millions of savers who opened accounts have benefited from them.

In the same way, Bush's prescription-benefits bill is opening up the drug industry to more competition by allowing a multitude of private discount companies to sign up customers, offering a variety of plans that may seem a little confusing at first but allow seniors to shop around for the best deal.

The Democrats overwhelmingly opposed Bush's prescription drug plan, largely because they hate the idea of turning anything over to the private sector.

The drug-discount program was "fundamentally flawed" because private businesses were delivering the benefit, Kennedy said last week. But this is, in fact, the program's strongest attribute, giving competitors every incentive to offer deeper discounts to sign up new members.

I wasn't a supporter of this program because I thought it was too big and too costly, adding heavier financial obligations onto a Medicare program that was already facing huge liabilities without the drug benefit add-on.

But there are recent signs that the cost projections may not be as high as initially feared. New estimates suggest the subsidy bills will be billions of dollars less than forecast.

If that's the case, it will be due in part to the program's market-oriented structure. That's something that needs to be broadened and improved in the legislative fine-tuning that will no doubt be done in the years to come.