Conservatives Should Vote "Yes" on Medicare
Every conservative member of Congress should vote for this Medicare bill. It is the most important reorganization of our nation's healthcare system since the original Medicare Bill of 1965 and the largest and most positive change in direction for the health system in 60 years for people over 65.
In a bold and unexpected move, the new Medicare bill includes a decisive shift to health savings accounts, which will allow every American to accumulate tax-free health dollars. HSAs allow account-owners to build savings and earn tax-free interest on their HSA contributions. HSA account owners can use their savings for tax-free spending on qualified health expenses, including health insurance premiums and deductibles, prescription drugs, and long-term care services including long-term care insurance.
If you are a fiscal conservative who cares about balancing the federal budget, there may be no more important vote in your career than one in support of this bill. Since health expenditures comprise almost 14 percent of the U.S. GDP, a shifting away from the failed bureaucratic third-party payer model and back to a market-mediated binary payer model, where the customer controls his own first health dollars, is the single most significant reform that can be made in saving the country from skyrocketing health costs and steadily increasing calls for taxpayers to finance more and more of the healthcare system through higher taxes.
Although some conservatives may complain about the cost of the drug benefit, this benefit was designed within the framework of the budget resolution. The Medicare drug benefit is a necessary improvement to a Medicare system that was designed before modern pharmaceuticals became a key to staying healthy. Does anyone believe it makes sense to pay billions for kidney dialysis and not pay for the preventive care drugs that lets people keep their kidneys healthy for only pennies per day? Let's face it, a Medicare drug benefit is inevitable. Liberals, some of whom are running for president, would pass it without any of the changes contained in this bill, and have said as much. However, to meet the future demands of retiring baby boomers the same liberals would either raise taxes massively or shift to a bureaucratic rationing of care--both disastrous policies.
Conservatives now have a chance to pass a sound Medicare drug benefit that includes very significant improvements to the Medicare program. This bill has reforms to increase co-morbidity management, disease management, a transition to electronic prescribing (which will save lives and money), and an incentive for hospitals to invest in IT and report on quality outcomes so people can make informed choices about which hospital to go to by being able to compare quality outcomes.
There are also reforms that create choices in Medicare plans including managed care, preferred provider organizations, and fee for service. This bill is about halfway between the very limited choice of today's Medicare and the amazing range of choices in the Federal Employee Health Benefit Plan (which provides the insurance for all federal employees, including members of Congress) but it moves us significantly in the right direction. It is a major step toward giving the baby boomers a multi-choice Medicare system for the 21st century.
Finally, in two breakthroughs with the liberal model of one-size-fits-all in a bureaucratically defined and controlled care system, this bill provides for some increase in costs for the wealthiest retirees (over $80,000 a year) and for a series of pilot projects of new approaches to creating more honest payments for the most expensive services. These pilot projects will offer seniors a range of choices and were carefully negotiated with AARP so that they provide a real opportunity to learn how to bring cost constraints into Medicare while also protecting seniors from unfair or inappropriate risk at a time in their lives when they are least able to sustain risk.
Obstructionist liberals would like all the money and none of the reforms. They will vote to reject a drug benefit for seniors in order to avoid positive reforms, which they know will increase individual choice, increase the range of options, and use market forces--instead of bureaucratic rationing--to bring costs under control. Obstructionist conservatives would like all of the reforms and none of the compromise. They would like to live in a world of 60 conservative votes in the Senate and no need to compromise with anyone, anytime over anything. But that is not the current reality.
I spent 16 years in a minority House Republican Party that enjoyed voting no, and enjoyed being in the opposition minority. Gradually, beginning with President Reagan, we built a positive conservatism that cut taxes, reformed welfare and Medicare, strengthened defense, and created a more prosperous America. By 1994, beginning with the Contract With America, we began to learn the difficult and different challenges of legislative leadership and governing instead of simply opposing. Now President Bush, Speaker Dennis Hastert, and Majority Leader Bill Frist, working with Chairmen Bill Thomas and Chuck Grassley and Democrat Senators Max Baucus and John Breaux, have produced a Medicare bill that provides a drug benefit for seniors, choices for the baby boomers, and the opportunity for a major shift toward health savings accounts for all Americans.
Obstructionist conservatives can always find reasons to vote no, but that path leads right back into the minority and it would be a minority status they would deserve.
Newt Gingrich is a senior fellow at AEI.