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WMDs found in Medicare legislation

By Craig J. Cantoni

The nation is facing two threats. The first comes from nations and terrorists that hate us and possess weapons of mass destruction. The second is from a different kind of weapon of mass destruction, a more insidious kind, the kind that is slowly but surely destroying us from within through mass entitlement spending, mass bureaucracy, mass taxation, and mass consumer and government debt.

Examples of the second type of WMD can be found in the 678-page Medicare reform bill being debated in Congress. The bill reads as if an enemy wrote it to strangle the nation in red tape and to bring us to our knees with the army of bureaucrats, lawyers and consultants that will be needed to interpret what the legislation says, including the second paragraph, which is quoted below:

"Except as otherwise specifically provided, whenever in division A of this Act or amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act."


It's downhill from there. Consider this gem on page 22:

"The coverage is designed, based upon an actuarially representative pattern of utilization, to provide for the payment, with respect to costs incurred that are equal to the initial coverage limit under subsection (b)(3) for the year, of an amount equal to at least the product of --

"(i) the amount by which the initial coverage limit described in subsection (b)(3) for the year exceeds the deductible described in subsection (b)(1) for the year; and

"(ii) 100 percent minus the coinsurance percentage specified in subsection (b)(2)(A)(i)."

I believe that the foregoing says that some faceless bureaucrat will determine reimbursement rates based on an ambiguous formula after subtracting deductibles and coinsurance.

Then there are the sections that allow the government to look into your knickers by having access to your medical information. The wording is couched in the terms of the privacy provisions of section 264(c) of the Health Insurance Portability and Accountability Act of 1996, which is another bureaucratic monster that gorges on the public treasury. Because of the act, herds of American sheeple have been obediently signing euphemistically labeled "privacy" forms in doctor offices without knowing what they are signing and without so much as a bleat of protest.

Naturally, the bill caters to politically influential special-interest groups. An example is on page 395:


"(a) Exclusion From OPD Fee Schedule. -- Section 1833(t)(1)(B)(iv) (42 U.S.C. 13951(t)(B)(iv)) is amended by inserting before the period at the end of the following: "and does not include screening mammography (as defined in section 1861 (jj)) and diagnostic mammography"."

In other words, breast cancer is more important to the government than testicular cancer.

The bill violates every precept of sound insurance. For example, on page 159 it says: "The issuer of a Medicare supplemental policy may not discriminate in the pricing of such policy, because of the health status, claims experience, receipt of health care, or medical condition..." Translation: Those who have lived healthy lives will be subsidizing those who have spent their lives smoking, drinking, eating fat-laden foods, engaging in risky sex and not exercising.

Of course, this is in keeping with the immorality of Medicare and other entitlements. Such programs are based on the notion that those who have lived beyond their means all of their lives and not saved for old age have a right to the money of those who have done the opposite. The notion is so widely accepted that no politician or mainstream journalist ever asks an elderly person the following question when he whines about not being able to afford medicine: "What kind of cars did you buy during your life and how often did you buy them?"

The fact is, the average American can build a nest egg of about $300,000 over a lifetime simply by buying inexpensive compact cars, keeping them for 120,000 miles, and not buying them with borrowed money -- versus buying more expensive cars every few years on credit. That's more than enough to buy medicine in old age.

The nation has a priority problem, not a health care problem.

The Medicare reform bill also continues the government's practice of wage and price controls. For example:

"The PDP sponsor of a prescription drug plan shall take into account, in establishing fees for pharmacists and others providing services under such plan, the resources used, and time required to, implement the medication therapy management program under this paragraph. Each such sponsor shall disclose to the Secretary upon request the amount of any such management or dispensing fees. The provisions of section 1927(b)(3)(D) apply to information disclosed under this subparagraph."

Or this:

"The Medicare Payment Advisory Commission shall submit to the Secretary, not later than July 1, 2005, a report on adjustment of payment for ambulatory payment classifications for specified covered outpatient drugs to take into account overhead and related expenses, such as pharmacy services and handling costs."

The foregoing language could have been lifted directly from a commissar's manual in the former Soviet Union, where central planning resulted in mass starvation under Stalin and bare store shelves under his successors.

American apparatchiks will continue to make doctors indentured servants of the state and to have the state come between doctors and patients. Consider:

"Not later than 1 year after the date of the enactment of this Act, the Medicare Payment Advisory Commission shall submit to Congress a report on the effect of refinements to the practice expense component of payments for physicians' services, after the transition to a full resource-based payment system in 2002, under section 1848 of the Social Security Act (42 U.S.C. 1395w-4)."

I wonder how the American sheeple would feel if there were a Payment Advisory Commission in Washington that set the pay for their occupations.

Apparently, doctors in Alaska will be getting a break from the appartchiks:

"(G) FLOOR FOR PRACTICE EXPENSE, MALPRACTICE, AND WORK GEOGRAPHIC INDICES FOR SERVICES FURNISHED IN ALASKA. -- For purposes of payment for services furnished in Alaska on or after January 1, 2004, and before January 1, 2006, after calculating the practice expense, malpractice, and work geographic indices in clauses (i), (ii), and (iii) of subparagraph (A) and in subparagraph (B), the Secretary shall increase any such index to 1.67 if such index would otherwise be less than 1.67."

The bill allows certain payment adjustments and disallows others. For example:

"If the adjusted allowable risk corridor costs (as defined in paragraph (1)) of the plan for the year are at least equal to the first threshold lower limit of the risk corridor (specified in paragraph (3)(A)(i)), but not greater than the first threshold upper limit of the risk corridor (specified in paragraph (3)(A)(iii) for the plan for the year, then no payment adjustment shall be made under this subsection."

Translation: Blah, blah, if you're a health care provider, blah, blah, you better give large campaign contributions to politicians, blah, blah, if you want more money, blah, blah.

What are the administrative costs of the 678 pages of gobbledygook? For sure, the costs will be ten times more than government estimates, which never include the costs imposed on the private sector and on individuals. Nor do the estimates include the opportunity costs; that is, where the money could have been spent if it were not spent on red tape, including on plant and equipment to make the United States more productive and competitive in world markets. And for sure the estimates do not include the cost of tens of thousands of the best and brightest Americans shifting from productive work to the make-work of interpreting regulations, litigating the regulations, consulting on the regulations, and writing computer software to administer the regulations.

Anyway, the following is what page 623 of the bill says about the startup administrative costs of Medicare reform. Note that the section is referring to startup costs, not the ongoing costs or the cost of the expanded entitlements themselves.

"There are appropriated to carry out this Act (including the amendments made by this Act), to be transferred from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund --

"(1) not to exceed $1,000,000,000 for the Centers for Medicare & Medicaid Services; and

"(2) not to exceed $500,000,000 for the Social Security Administration."

When my poor grandparents immigrated to the United States from Italy in the early 20th century, taxes were about a third of today's. If they needed medical care, they simply walked into a doctor's office or drug store and paid the doctor or pharmacist with cash or a chicken. There were no intermediaries, and there were not 678 pages of new legislation on top of 120,000 pages of existing Medicare regulations. But there was a high savings rate, as there is in China today.

Medicare reform has sown more seeds of our eventual economic destruction.

Mr. Cantoni is an author, columnist and founder of Honest Americans Against Legal Theft (HAALT).