Freedom to Choose

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Senate Democrats recently sent a letter to President Bush telling him what they would and would not accept in the final version of the Medicare (search) prescription-drug legislation being hammered out by federal lawmakers.

The 37 signatories listed six demands they considered non-negotiable. Not one of them addressed what Medicare needs most -- real reform.

Medicare is broken. When new life-saving technologies become available, it takes the Medicare bureaucracy 15 months to five years, on average, to approve them for Medicare patients. More and more doctors don't want to see new Medicare patients. They have had enough of Medicare's bureaucracy, with its low reimbursement schedules and hundreds of thousands of pages of rules and paperwork. And things figure only to get worse when the 77 million baby boomers begin to retire in 2011.

But Congress seeks to reconcile two bills that have one big, costly thing in common: They add an expensive new universal drug entitlement (search) to an already-cash-strapped program. Neither simply targets funds to low-income seniors without drug coverage, the ones who need the most help. Seniors enthusiastically support the concept of prescription-drug coverage. But does this have to be the way?

Why not a system that seniors want to be in and doctors want to serve? Why is it so bad that President Bush's original proposal called for encouraging -- but not mandating -- seniors to switch from Medicare to government-subsidized system of competing private health plans? How do we know this is not the best way?

It works for Congress, its staff, the White House staff and nearly nine million other federal employees, their families and retirees. This system, the Federal Employees Health Benefits Program (search), works so well, in fact, that the House of Representatives recently voted -- on a voice vote (no voting records, thank you) -- to protect federal retirees, including congressional retirees, from the consequences of the Medicare bill's drug provisions that they're prepared to impose on private-sector retirees.

The upshot: Under the Medicare bills, millions of retirees will be dumped out of private coverage into the government program, but not the federal or congressional retirees.

The FEHBP offers federal workers a choice of at least 12 health plans nationwide and often as many as 20 or more in many areas of the country. All have prescription-drug benefits. All enjoy high rates of approval and re-enrollment among beneficiaries.

What's wrong with this approach? Opponents say private insurers haven't exactly clamored for the senior market, and they're right. But it's never been available to them in the way it would be if Congress enacted these simple FEHBP-style reforms.

Opponents further argue that these changes add up to a loss of tight control by the government, and that, absent that level of control, profit-driven insurance companies could cut off the most vulnerable patients. But the federal-employees program has safeguards against exactly this: It requires companies to offer a core of benefits to be eligible to enter this field and enroll all comers, regardless of age or health condition. And it enforces strict anti-discrimination rules. The same can easily be done for new health plans in Medicare.

Meanwhile, most seniors would be in health plans of their choice, including those they had in their active working life, or those they chose themselves based on benefits offered and their individual needs. And government would be done micromanaging what kind of medical treatments they can and cannot get, and under what conditions they get them, and where they can get them.

And it's not that hard. In fact, simplicity is one of its major selling points. The entire federal employees' program has 122 pages of regulations. The bills passed by the House and Senate, by contrast, run 700 to 1,000 pages, with new regulatory requirements that would add to the tens of thousands of pages of rules, regulations, administrative guidelines and other paperwork that already burdens traditional Medicare.

This doesn't have to be so hard. Why not a system that encourages providers to operate efficiently, insurance companies to provide better service and seniors to get the kind of quality care they need and deserve under the new arrangement -- or stay in traditional Medicare if they so choose?

Choice is freedom. And it's what America's seniors, now and in the future, deserve.

Derek Hunter is a researcher in the Center for Health Policy Studies at The Heritage Foundation, a Washington-based public policy research institute.