Not Quite a New Mustang

President Bush’s Rose Garden speech Thursday about Medicare reform had what has become a defining mark of his administration. It was wittily precise in identifying a legitimate problem but vague about how to solve it.

The problem is that Medicare is a benefit designed in 1965, when health care was almost synonymous with hospital care. It does nothing to help seniors get prescription drugs, which are now more important to well-being than surgery.

As the president put it, “It may be that cars don’t get any better than the 1965 Mustang. But even the ’65 Mustang didn’t have power windows or antilock brakes. When it comes to cars, and when it comes to health care, 1965 is not the state of the art.”

Bush’s admittedly stopgap solution would establish a national prescription drug discount program in which Medicare would “endorse and promote” privately administered prescription drug discount cards. An example is the YouRxPlan card offered by Merck-Medco, which gives 10% to 30% discounts on some drugs to people who pay a yearly membership fee of $25.

Unfortunately, because Bush did not provide specifics, it is impossible to know whether the discount programs would be implemented to benefit seniors more than the drug makers that would run them and capture new customers with them. A similar program in Washington state failed to show clear benefits.

In his speech, Bush also vowed to “expand coverage” so that “all the Medicare plans must offer benefits at least as comprehensive” as the Federal Employee Health Benefits Program. The president failed to mention, however, that the benefits program has increased premiums 10.5% this year alone, mostly to pay for soaring drug costs. Nor did Bush acknowledge federal budget estimates released earlier this year showing prescription drug costs rising 30% faster than previously projected.

Congress addressed those rising costs Wednesday by voting to let Americans order prescription drugs by mail from countries, including Canada and Mexico, where they are cheaper. The logic of encouraging Americans to buy U.S.-made drugs in Canada instead of trying to reduce prices at home is elusive. But without a better idea, the House proposal should become law.

If Bush is serious about achieving a viable prescription drug benefit, he will have to make hard policy choices, starting with the recognition that, as Australia and Canada long ago discovered, government can guarantee its citizens access to only a certain number of well-proven prescription drugs. Subsidized access to everything in the pharmacy is just too costly.

The president has not discussed the cost or operational details of his Medicare reforms. Given the admission Wednesday by his budget advisor that the administration may propose tapping the Medicare trust fund to keep the government out of deficit, Bush will have to make difficult choices that his rhetoric does not reflect.