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Commentary

Health of the Union
David Gratzer, Wall Street Journal, 1-26-05

David Gratzer, a Senior Fellow at the Manhattan Institute, advises President Bush to take up Medicare reform in his upcoming State of the Union address. While this may seem like a daunting task, Gratzer reminds us that bipartisan reforms have been advanced in the past that could revolutionize the program without relying on self-destructive wage and price controls.

Seven years ago, Sen. John Breaux and Rep. Bill Thomas completed the final report of the National Bipartisan Commission on the Future of Medicare. Considering various reforms, they eventually settled on a proposal modeled after the popular Federal Employees Health Benefits Plan (FEHBP), which covers nine million federal employees and their families. Instead of today's one-size-fits-all Medicare structure, they envisioned a program where seniors choose among competing private plans.
Since then, Washington has debated the size and scope of Medicare expansion -- such as the prescription benefit -- but the program itself has yet to be fundamentally rethought. It needs to be, because faced with Medicare's rising costs over the past four decades, the only real response has been a bipartisan exercise in wage and price controls. The results have been dismal …

While the White House may be leery of going back to Medicare after criticism over Part D benefits and its painful experience with Social Security reform, there is good reason to think the effort would be worth it. Putting a serious, thoughtful, and detailed program on the table would force everyone in sit up and take notice of the President’s agenda, and allow him to set the tone and direction of the health care debate.



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