by Zaid Jilani, ThinkProgress, April 30, 2011
In taking aim at Medicare, these conservative members of Congress are claiming that they are actually “saving Medicare” from financial ruin and that there is no possible choice other than to privatize the program and throw seniors to the insurance industry. They say this to justify a plan that the Congressional Budget Office says would have the elderly spending the majority of their income on health care.
Yet what Rep. Paul Ryan (R-WI) — the architect of the plan to end Medicare — and other right-wingers don’t want you to know is that there are actually numerous way to shore up the fiscal solvency of Medicare that wouldn’t involve such a dangerous privatization scheme.
ThinkProgress has assembled three different policy options that, if enacted, could help Medicare’s future financial issues and save the taxpayer billions of dollars:
1. Empower Medicare To Negotiate For Lower Drug Prices: One policy option that would be very simple to enact and would not require any sort of increased spending or expansion of government would be to simply allow Medicare to use its bulk purchasing power to negotiate with drugmakers for lower prices. The program is currently banned from doing so, thanks to the clout of the drug industry. Rep. Peter Welch (D-VT) estimates that doing this could save as much as $156 billion over 10 years.
2. Allow Drug Reimportation From Canada: One of the major costs in the U.S. health care system that drives up the costs not only in the private sector but also among Medicare are the costs of prescription drugs. One very easy was to greatly relieve this cost is to eliminate protectionist barriers and allow the free importation of prescription drugs from our neighbors like Canada. A failed measure proposed by Sens. Byron Dorgan (D-ND) and John McCain (R-AZ) to do exactly that in 2009 estimated that doing so would save consumers $80 billion over ten years.
3. Globalize Medicare: Another protectionist barrier and detriment to free trade in the U.S. health care system is that seniors currently aren’t allowed to use their Medicare insurance system outside of the United States. An alternative to this would be to drop these trade barriers and allow seniors on Medicare to seek care abroad, where services are much cheaper. Economist Dean Baker estimates that if fifty percent of Medicare beneficiaries opted for this globalized option, then taxpayers would save more than $40 billion a year by 2020. President Obama dismissed this option when asked about it at a recent town hall meeting.
The primary reason these three common sense initiatives have not been enacted in the United States is because of deep opposition from the drug industry, for-profit hospitals, and other medical-industrial complex interest groups. Yet they all present simple and effective ways to lower costs and help shore up the finances of the Medicare program. If Ryan and other so-called reform advocates were serious about ensuring the fiscal solvency of the Medicare program and lowering health care costs for Americans, they would not remove these options from the debate.