Health Care Reactionaries

Posted: Aug 21, 2003 12:00 AM

WASHINGTON, D.C. -- It is time to take a break from geopolitics and war, and to write about a matter that is near to my heart, health care. I write as a confirmed hypochondriac. I have more medicines in my medicine cabinet than Arianna Huffington.

In fact, I have more medicine cabinets than Arianna Huffington, and I did not even have to divorce a multimillionaire to afford my multitudes of medicine cabinets. I have a half-dozen personal physicians. The only docs I avoid are plastic surgeons, and that is because they would have me looking like Sen. John Pierre Kerry.

Thus, you might think I am exultant over the advance of the new prescription drug bills through Congress that our solons plan to append to Medicare. Actually, I am not. As these bills approach the conference committee where they will be reconciled, I reach for the Prozac. They are unfunded. They are likely to lack market-based reforms. They will force all of us into a health care straitjacket.

We hypochondriacs need to be able to make choices. What strikes me as an unendurable affliction might strike you as a hangnail. Yet I might want to take my hangnail to a doctor and I ought to be able to, assuming I pay for it. With a proper array of health care programs available to me, I just might be able to get insurance for my hangnails.

The basic thing that all of us -- hypochondriacs and the physically fit alike -- need to remember about health policy is a condition that the great economist Milton Friedman recognized a generation or more ago, to wit: Health care demand is elastic. The cheaper and more available it is, the more it will be in demand. If it were free, we hypochondriacs would be in the doctor's office all the time. At least, we would be in the doctor's office if the doc's fees were paid by government -- and if government did not regulate care, thus restricting procedures.

The restriction of procedures is just one of the problems with Medicare. The other is that it is underfunded and will go bust someday. Scholars at the American Enterprise Institute calculate that Medicare's long-term shortfall is more than $30 trillion. If the contemplated prescription drug coverage is thrown in, add another $6 trillion to $12 trillion. And still I cannot get my hangnails treated.

As the shortfall mounts, ordinary Americans will not be able to get some genuinely urgent procedures covered. In fact, services are being cut back even now. In the years to come, there will be more cutbacks in Medicare and a huge tax increase.

The government cannot run unfunded programs forever. Yet with the present prescription drug bills now headed for conference, that is about what the politicians are contemplating. To repeat the unspoken truth of these prescription-care bills is that they are not even funded.

The Bush administration until recently included market-based reforms in its plans for prescription-drug legislation. Now it has apparently thrown in the towel. Sen. Edward Kennedy is opposed to such measures. Of course, any market-based reforms can be expected to rouse Kennedy's ire. He wants to move toward a single-payer health system whose proper name is socialism. Any policy that further damages Medicare he believes will put further pressure on the government for his quaint 1930s goal.

Actually, the government already has a solution to the health care muddle, but it is only available to members of Congress and government employees, namely, Federal Employees Health Benefits Program (FEHBP). In its 28 years, FEHBP's costs have been no greater than Medicare's, and its benefits are more extensive. Even a hypochondriac can admire it.

Under FEHBP, the government's Office of Personnel Management annually sends out a memo to health insurance providers, outlining goals and soliciting each company to put together plans consistent with those goals. The plans that meet the government's minimum standards are offered to government employees, who can then select the policy of their choice. Furthermore, employees can negotiate with the companies as to which options are included in their personal policy.

I would want the hangnail option. Thus my policy might cost a bit more than Kennedy's, though he ought to take the weight-watcher's option. The government then agrees to pay between 72 percent and 75 percent of the policy premium.

FEHBP has wide acceptance among health specialists and health care providers. Frankly, I cannot understand why Republicans and Democrats cannot agree on extending it beyond government employees to the rest of us. The only reasons I can ascertain are that: A) Republicans are not up to the political fight, and B) Democrats are holding out so as to move national health care toward socialism and away from market reforms.

By now, it is pretty clear that today's reactionaries are with Kennedy.