I’ve railed against this before, and I hate being on the same side ofan issue as Paul Krugman, but he is right:
There was a brief flurry of outrage when Congress passed the 2003 Medicare bill. The news media reported on the scandalous vote in the House of Representatives: Republican leaders violated parliamentary procedure, twisted arms and perhaps engaged in bribery to persuade skeptical lawmakers to change their votes in a session literally held in the dead of night.
Later, the media reported on another scandal: it turned out that the administration had deceived Congress about the bill’s likely cost.
But the real scandal is what’s in the legislation. It’s an object lesson in how special interests hold America’s health care system hostage.
The new Medicare law subsidizes private health plans, which have repeatedly failed to deliver promised cost savings. It creates an unnecessary layer of middlemen by requiring that the drug benefit be administered by private insurers. The biggest giveaway is to Big Pharma: the law specifically prohibits Medicare from using its purchasing power to negotiate lower drug prices.
Outside the United States, almost every government bargains over drug prices. And it works: the Congressional Budget Office says that foreign drug prices are 35 to 55 percent below U.S. levels. Even within the United States, Veterans Affairs is able to negotiate discounts of 50 percent or more, far larger than those the Medicare actuary expects the elderly to receive under the new plan.
After the drug bill’s passage, Jacob Hacker and Theodore Marmor of Yale University estimated that a sensible bill could have delivered twice as much coverage for the same price.
A shameless giveaway to big business is all this bill was, much like the Bankruptcy Bill.