Government Spending

Happy Birthday, Medicare Part D! Now Die! Die! Die!


Economist Bruce Bartlett, an occasional Reason contributor and a pariah to many for (accurately) calling George W. Bush a phony fiscal conservative, reminds us that one of the absolutely biggest pieces of crap legislation has a birthday come Monday: Medicare Part D, the prescription drug plan that gives relatively wealthy seniors near-free drugs.

According to the latest actuaries' report, Medicare Part D will cost taxpayers — beneficiaries pay virtually nothing — $62 billion this year. This figure is expected to rise sharply in coming years to $150 billion in 2019. By 2030, Part D alone will cost taxpayers 1 percent of GDP. In present value terms, Medicare Part D adds almost $16 trillion to our national indebtedness. (That's how much would need to be in a trust fund today to pay all the benefits that have been promised over and above the trivial premiums paid by beneficiaries.) That is why former U.S. Comptroller General David Walker has called the unfunded prescription drug benefit "the most fiscally irresponsible piece of legislation since the 1960s."

You got that right, Bruce. The prescription drug plan is about the worst giveaway you could imagine, just a pure, unadulterated sop to a bunch of politically connected voters. When the plan was first being discussed, seniors were paying a whopping 3.2 percent of their income on pills annually – less than they did on entertainment. As Bartlett points out, George Bush and the House Republicans (including Speaker-elect John Boehner and budget whiz Paul Ryan) who voted overwhelmingly for it didn't even bother to pretend they were going to pay for it with tax hikes or spending cuts (kudos to Sen. John McCain and the handful of other Republicans who voted against it in the Senate). Just an awful plundering of the young and relatively poor to give booty to the old and relatively flush.

Bartlett argues that the GOP learned how to stop worrying and love Medicare after they got their asses handed to them after the mid-'90s shutdown. The shutdown in large part was a result of a Clinton-Gingrich bitch fight over a GOP plan to cut back on what Ronald Reagan used to demonize as "socialized medicine." Since, then, says Bartlett, the Republicans have never been slow to gild Medicare. Most recently, they did this during their attacks on ObamaCare. The prez, they warned, would pay for his evil plan to socialize medicine by taking money from…Medicare! As a matter of basic fact, they are correct. But precisely how Medicare, especially that goddamn prescription drug plan, is worth saving at all is beyond me.

Bartlett is right to claim that the GOP of the past 10 years (at least) has never proven itself serious about cutting deficits. And I think he's right when he says:

Prodded by their new-found allies in the Tea Party movement, Republicans may have no choice but to make a serious assault on federal spending…. At some point they must address Medicare if they are serious about cutting federal spending. But then they risk throwing away all the hard-earned support they gained by adding trillions of dollars to the public debt with their unfunded Medicare Part D expansion…. A key test of whether the Tea Partiers mean what they say about cutting federal spending, or whether they are just blowing smoke, will be what they do on Medicare. If they have any guts, they'll make repeal of Medicare Part D their first order of business.

Rage on, Cousin Brucie, rage on! And Tea Partiers, don't be misled by bullshit spectacles like votes to cut NPR's funding. I'm all for that, but if the GOP doesn't get real serious real soon about cutting spending, well, it's time to start looking elsewhere (again).

Whole Bartlett thing here.

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  1. Medicare out of the USA and USA out of Medicare!

  2. …it’s time to start looking elsewhere (again).

    The next place to look is bankruptcy. Economic collapse will be our leader.

  3. But pills are our entertainment!* And thanks to the Democrats, we get eat the whole damn doughnut! Yeah, Medicare D, a bad Republican idea that the Democrats made worse.

    *I think I made this joke earlier, but when you’re rocking on Xanax it’s hard to remember. In fact, if Xanax wasn’t a palindrome, I couldn’t even get a prescription filled!

    And what does Sustenna do for you? And when did Burberry and Armani start advertising in Reason? I guess it’s the Metropolitan Museum of Art crowd that Dave is bringing in.

    1. “But pills are our entertainment!*”

      I thought you were talking about viagra…boners for all, and all for boners!!!

  4. OTOH, Bartlett actually believes the shit about the current Obamacare being paid for (saying in that article that “largely covered the cost”), pretends that Obamacare didn’t have the same sort of shenanigans about lying about the cost that he accurately blasts the GOP for doing with Medicare Part D, called on the GOP to ally with the Democrats on Obamacare in order to make a better bill rather than opposing it and letting a worse bill get passed– even though that’s what the GOP did on Medicare Part D, and also mistakenly believed that “no Democrat voted for Medicare Part D,” and continued to insist that even in the face of me showing him the rollcall vote.

    He also nicely quotes the Tax Policy Center about what percentage of people don’t pay any income tax in 2009 now in the context of blaming it on Republicans, even though a substantial portion of that increase is from the stimulus.

    At this point, he’s rather obsessed with Republicans to the point of actively excusing the Democrats for when they do the same thing.

    1. bartlett’s been like that a few yrs. now.

      I looked at Medicare Part D at the time, and still, not so much as pandering but as an excape valve. Pressure had been bldg. for years on socialized medicine, because it’s relentless (and worldwide), Hillarycare having been merely a political setback. And one of the biggest pressure points had been prescription drugs. Medicare Part D was a relatively cheap way to stave off worse, dividing and conquering — temporarily, of course.

  5. Happy Birthday, Medicare Part D! Now Die! Die! Die!

    But how do you really feel? (He’s right, but I wonder if Alan needs to pass some of those Xanax’ along…but they’d probably throw you in jail for that.)

  6. Cousin Brucie? Shitbird Brucie. After reading that presidential election follow up with Cousin Douchie, I see no need to read anything that fuckstick has to say. But, yeah, Medicare Part D, was a big bipartisan turd.

  7. It is fucking hilarious that Reason is stating Republicans had better get serious about cutting spending really soon or they will look elsewhere six fucking weeks before they even take power. You may want to wait until they are in charge first.

    1. Six weeks is “real soon”.

  8. More Bartlett in praise of ObamaCare (which I just posted in the doc fix episode – but its good)

    Now we turn to Medicare’s 2010 report. It shows enormous improvement in the program’s long-term costs as a result of the Affordable Health Care Act. Starting with Part A, we see that Medicare’s actuaries are projecting no long-term deficit whatsoever. Last year’s projected deficit of $36 trillion has literally fallen to zero (p. 85). Part B’s finances also show significant improvement, with the long-term deficit falling from $37 trillion to just $12.9 trillion or 1.5 percent of GDP. Medicare Part D’s finances are unchanged. The long-term deficit is estimated to be $15.8 trillion or 1.1 percent of GDP.

    Putting these numbers together, we see that Medicare’s unfunded liability fell from almost $90 trillion in 2009 to less than $30 trillion, a two-thirds improvement in one year. As a percent of GDP, the taxpayers’ obligation has fallen from 6.8 percent to 2.6 percent. Throw in Social Security’s unfunded liability, estimated by its actuaries (p. 65) this year at $16.1 trillion, or 1.2 percent of GDP in perpetuity, we see that the potential tax increase from entitlement programs has fallen in half, from 8 percent of GDP to 3.8 percent. That still means a possible income tax increase of 38 percent, but that’s a lot better than 80 percent.

    BRUCE BARTLETT – The Fiscal Times

    1. I’m sure those projections are just as accurate as Medicare’s projected costs were when it was passed. They were only off by an order of magnitude.

    2. John Thacker already smacked this silliness around on the other thread.

  9. As a Part D recipient (and premium payor), it has not been free; but a deficit. I pay $1200/yr in premiums for $2800 of coverage minus my co-pays, which cost as much as 25% of the drug price, easily making the premium costs a wash. So, the insurance cos. contracting w/Medicare are making out like bandits because in a free market, no one would purchase that deal. It’s rent-seeking, pure and simple.

  10. Medicare Solutions can help you find the best medicare drug plans to fit your life and budget. With a list of providers, health plans listed by state and commonly asked questions, Medicare Solutions is the leader for assistance with medicare supplement.

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