Shrug Coverage


It was not so long ago that President Bush was bragging about his
Medicare reform law, which gives senior citizens the opportunity to
buy private insurance that will help pay for their prescriptions:
"The days of low-income seniors having to make painful sacrifices
to pay for their prescription drugs are now coming to an end." But
somebody forgot to tell the old folks in Maine about this
legislative miracle. On January 3, two days after the Bush
initiative went into effect, the state's assistance hotline logged
18,000 calls. "We had dialysis patients who were not getting
medicines, pharmacies on hold for 60-plus minutes, some plans
closed for the holiday," a state official told The Washington Post.
"One man called me--he and his wife were on 15 medications. ... He
went in for 15, and he left with one."And it wasn't just Maine. Since the Bush Medicare drug plan went
into effect, according to The New York Times, tens and maybe
hundreds of thousands of people have shown up at their pharmacies
only to learn that their new insurance plans either don't cover
their drugs or that the coverage doesn't exist at all. Worse yet,
the majority of these people are so-called "dual eligibles,"
meaning that they are not only old and sick but also poor--in other
words, exactly the kind of people who are most dependent on drugs
and least able to afford them on their own.

The administration's initial response will be familiar to anyone who
recalls the early months of the Iraqi insurgency or the first few
days after Hurricane Katrina. "This is going very well," a
spokesman at the Center for Medicare and Medicaid Services (CMS)
said on January 4, with apparent seriousness. When the difficulties
became too widespread for even the Bush administration to ignore,
officials fell back on another well-rehearsed excuse: Glitches were
inevitable given the nature of the task. "We know there are going
to be bumps in the road, " another CMS spokesman said. "It's a new

Most people probably think this makes sense, since most people think
that the government always bungles such massive undertakings
anyway. But consider what happened when the Johnson administration
rolled out Medicare for the first time in July 1966. Back then, the
obstacles were even more daunting than they are today. Rather than
simply adding a benefit for a relatively narrow class of services
(prescription drugs), introducing Medicare meant establishing an
entirely new insurance program in just eleven months. There were
concerns about hospital capacity: What if seniors held off on
medical treatment until the benefit kicked in and then flooded
facilities? There were also racial complications: LBJ had insisted
that Medicare refuse payments to hospitals that didn't abide by
federal civil rights guidelines. Since many Southern hospitals
remained segregated, senior citizens there might have had no place
to go.

So what happened on the day that this complex program was
implemented? Thousands of senior citizens simply went to the
hospital and got the health care they needed. "There were no crises
that I remember," says Yale University political scientist Theodore
Marmor, who worked in the office overseeing Medicare implementation
and went on to write The Politics of Medicare, the program's
definitive history. Newspaper accounts from the '60s back him up.
Under the headline "medicare takes over easily," a Post writer
described the program's first day as "a smooth transition,
undramatic as a bed change." Three weeks later, the Times affirmed
that "medicare's start has been smooth."

What did Johnson do right that Bush did wrong? Start with the people
he put in charge. Today, the man directly responsible for Medicare
is Mark McClellan, a physician and former Stanford economist.
Though hardly a Michael Brown, McClellan has no prior experience
when it comes to implementing social insurance programs. (His
predecessor, Tom Scully, left CMS to become a lobbyist almost
immediately after the Medicare bill passed.) The man Johnson tapped
to run Medicare was Robert Ball, a longtime civil servant who had
worked his way up through the Social Security Administration
starting in 1939. He and other veterans helped design the
program--urging, among other things, that the law take effect in
summer, when hospitals would be least crowded.

Another difference between the two administrations is their
willingness to take initiative. Last year, experts repeatedly
warned the Bush administration that it had inadequate contingency
plans in place, culminating in a December Government Accountability
Office report that predicted with eerie accuracy exactly what has
happened at pharmacies around the country these past two weeks.
LBJ's team was far more cautious. Although confident that hospitals
could handle any potential surges, it still drew up plans for
transferring patients to overflow facilities, even lining up
helicopters in Texas to provide speedy transport.

Granted, senior citizens probably need more hand-holding in 2006
than they did in 1966, because the new law channels its drug
coverage through private insurance companies from which
beneficiaries must choose. But that, too, is a distinction: While
Bush talks of "choice" as his plan's greatest virtue, seniors seem
bewildered by having to pick from as many as 52 different
prescription plans, each one with different premiums, cost-sharing
requirements, and lists of drugs covered. By contrast, Johnson
administration officials had argued against inundating seniors with
such options. "I would not have dreamed of going about this in a
way that meant individuals had to choose from among all these
possibilities," Ball says today. "I would have expected chaos."

And, from Maine to California, chaos is just what the Bush
administration has gotten. This isn't surprising, considering that
the administration designed its Medicare plan to serve its
ideological agenda--privatizing government services and enriching
special interests like the insurance and pharmaceutical
industries--rather than senior citizens. The original Medicare law
reflects a rather different tradition: the New Deal. Its architects
believed that protecting people from economic and medical risk was
a job that only a robust and, yes, big government could do
properly. Of course, that's a pretty unfashionable idea nowadays.
But that hardly makes it wrong.

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