Bush's Medicare Dream Turning Into a Nightmare
By William Douglas              The Detroit Free Press
HOME
Monday 22 March 2004
WASHINGTON - Enactment of a sweeping Medicare overhaul law last year was supposed to be the crowning achievement of President George W. Bush's "compassionate conservatism" as he readied himself for re-election.
But less than four months after he signed it into law on Dec. 8, Bush's Medicare reform dream has turned into a nightmare and a potential drag on his bid for re-election. The biggest expansion of the government social service net in a generation now is drawing fire on several fronts:
The Health and Human Services general inspector's office is investigating a claim by the government's top expert on Medicare costs that the administration concealed from Congress the true cost of the program.  The House Ethics Committee plans to investigate whether threats and bribes were used to pass the bill in the House. The General Accounting Office (GAO) is investigating whether the Bush administration spent millions of taxpayer dollars on TV ads touting the Medicare reform law that look suspiciously like Bush campaign commercials.
The Medicare law will provide about 40 million seniors with a prescription drug card beginning this year that could net savings of 15 percent to 25 percent. Beginning in 2006, seniors will be able to enroll in a Medicare drug plan or join a private health insurance plan offering drug coverage.
But the law's afterglow faded fast once lawmakers learned it could cost at least $100 billion more than the $395 billion over 10 years that the White House claimed. That revelation in late January riled budget hawks who had said they wouldn't vote for a measure that cost more than $400 billion.
Lawmakers got steamed again this month when the nation's top Medicare actuary, Richard Foster, told the Free Press Washington bureau that he had projected the higher cost long before Congress voted. Foster said his boss, former Medicare administrator Thomas Scully, threatened to fire him if he gave the real numbers to Congress.
House Democrats, led by Rep. Henry Waxman, D-Calif., the ranking member of the House Government Reform Committee, are threatening a lawsuit to force Health and Human Services Secretary Tommy Thompson to turn over all of Foster's undisclosed estimates.
Karl Rove, Bush's chief political strategist, called the Medicare issue "much ado about nothing" on Friday.
Democrats say they hope to get answers Wednesday during a House Ways and Means Committee hearing.
Unusual Vote
The House Ethics Committee has launched an investigation into allegations by Rep. Nick Smith, R-Mich., that "bribes and special deals were offered" to induce him to vote for the bill.
Many lawmakers also felt abused when they said GOP leaders pushed the bill through the House on Nov. 22 by keeping the vote open for nearly three hours -- usually votes are allowed only 15 minutes -- and by twisting members' arms until they supported it.
Smith, who voted against the bill, initially said that unidentified Republican power brokers offered "extensive financial support and endorsements for my son, Brad, who is running for my seat. They also made threats of working against Brad if I voted no."
Smith later backed off his bribery claim, but the Ethics Committee is proceeding anyway.
Ads Investigated
In addition, the GAO, the investigative arm of Congress, is examining whether Health and Human Services TV ads touting the new law -- with prominent pictures of Bush -- constitute illegal political propaganda. The GAO already has concluded that the ads contain "notable omissions and errors," but its preliminary judgment was that they are legal.
Meanwhile, a Gallup poll in January showed public dissatisfactionwith the program. Fifty-three percent of those surveyed said the prescription drug benefit didn't go far enough; 27 percent said it was about right while 9 percent said it went too far.
Cover-up Alleged
The mushrooming controversy is spurring cries of cover-up from Democrats.
"There is no place for silencing the truth," said Sen. John Kerry of Massachusetts, the presumptive Democratic presidential candidate. "I believe the American people deserve real answers on why this administration is keeping public officials quiet and keeping facts from the American people."
By last week's end, congressional Republicans were rallying behind Bush and dismissing the allegations as a Democratic scheme to discredit a GOP triumph.
Independent analysts, including conservatives, weren't so sanguine. "This bill will not go down in the annals of good government," said Robert Moffitt, the director of the Center for Health Policy Studies at the Heritage Foundation. "Now it's a political problem."
Contact William Douglas at wdouglas@krwashington.com. The Chicago Tribune contributed to this report.
Drug Cards Dissected
By David Sirota, Christy Harvey and Judd Legum
The Center for American Progress/Alternet
Friday 26 March 2004
Remember, the legislation was crafted by the head of one of the companies chosen to provide the card, Bush crony and AdvancePCS chief David Halbert.
AARP's Shocking Support for Drug Legtislation: AARP is affiliated with and receives "marketing royalties" from  United Health Care, one of the major companies the Administration included in the drug card program.
The government announced yesterday the names of the 28 private companies picked to provide prescription drug cards to Medicare recipients beginning this June. The prescription cards purport to provide seniors with discounts on their medications. However, no such discount is guaranteed, and the legislation may help pharmaceutical and insurance companies a lot more than the elderly. Little wonder: Remember, the legislation was crafted by the head of one of the companies chosen to provide the card, Bush crony and AdvancePCS chief David Halbert. The 28 private companies, also including such heavy hitters as United Healthcare, Caremark, Aetna, and Express Scripts along with AdvancePCS, worked hard to ensure the law would be in their favor. According to the Center for Responsive Politics, the top groups donated well over $150,000 directly to President Bush and Congress since 2000 and Aetna, United Healthcare and Wellpoint alone have spent over $3.25 million to lobby for their interests. See this American Progress examination of how privatization threatens Medicare.
So who are these companies the White House is entrusting with caring for the nation's seniors? One is Medco, a company which has faced lawsuits over market manipulation in the past for "failing to disclose the extent of their financial ties with manufacturers." AdvancePCS, a company in which President Bush himself was an original investor, was sued last year, accused of "not only 'illicitly diverting' seniors from its drug-discount plan, but of actually putting them at risk for potentially dangerous drug interactions." Both were listed in a federal lawsuit along with Caremark and Express Scripts for engaging in "anti-competitive practices" which harmed pharmacies, for entering into "secret deals with drug manufacturers...in return for 'kickbacks' and other 'undisclosed incentives.'"
So where has the AARP been during all of this? Although the AARP is ostensibly a group dedicated to protecting the rights of seniors, the group shocked its members when it supported the drug legislation last November. Now it turns out there may have been a financial windfall in play: AARP is affiliated with  and receives "marketing royalties" from  United Health Care, one of the major companies the Administration included in the drug card program.
The theory behind the discount cards is that companies "will have greater bargaining power with drug makers" the more they enroll  Medicare beneficiaries. But why use a middle man? Bowing to pressure from the powerful pharmaceutical lobby, which feared for its bottom line, Congress specifically banned Medicare from using bulk purchasing power to negotiate lower prices. Instead, the Medicare population was splintered into these smaller groups run by private companies, thus giving them considerably less influence.
The law does not require the drug card companies to pass the savings along to customers instead of keeping profits for themselves. They don't even have to guarantee a specific level of savings for seniors. And drug companies have gone out of their way this past year to ensure their profits will stay nice and fat: The Wall Street Journal reports companies jacked up prices for drugs most popular with the elderly "nearly 3.5 times faster on average than overall inflation" in the past year since the cards were announced, already eroding any potential savings. Sen. Tom Daschle (D-SD) is trying to ensure seniors get some of the discount; he introduced a bill yesterday which would guarantee that beneficiaries receive at least 90% of any discounts.
Another massive problem with the cards: Seniors are locked into only one card. However, card companies have much more flexibility and aren't required to return the loyalty to clients. Right now, companies are allowed to change the list of drugs they offer every seven days, as well as the size of the discounts, and there is no oversight mechanism in place to stop that from happening. Ron Pollack, of the watchdog group Families USA, fears cards will offer giant savings on popular medicines, then, after seniors sign up, greatly reduce the savings or stop covering the drug altogether. "The potential for bait-and-switch is enormous."