More Medicare Fiasco

Atrios has Krugman's whole op-ed up at his blog after sneaking him out from behind the TimesSelect wall. Here's a sample:

Thomas Scully was a hospital industry lobbyist before President Bush appointed him to run Medicare. In that job, Mr. Scully famously threatened to fire his chief actuary if he told Congress the truth about cost projections for the Medicare drug program.

The new prescription drug benefit is off to a catastrophic start. Tens of thousands of older Americans have arrived at pharmacies to discover that their old drug benefits have been canceled, but that they aren't on the list for the new program. More than two dozen states have taken emergency action.

At first, federal officials were oblivious. "This is going very well," a Medicare spokesman declared a few days into the disaster. Then officials started making excuses.

[...]

Consider the career trajectories of the two men who played the most important role in putting together the Medicare legislation.

[..]

Mr. Scully had good reasons not to let anything stand in the way of the drug bill. He had received a special ethics waiver from his superiors allowing him to negotiate for future jobs with lobbying and investment firms - firms that had a strong financial stake in the form of the bill - while still in public office. He left public service, if that's what it was, almost as soon as the bill was passed, and is once again a lobbyist, now for drug companies.

Meanwhile, Representative Billy Tauzin, the bill's point man on Capitol Hill, quickly left Congress once the bill was passed to become president of Pharmaceutical Research and Manufacturers of America, the powerful drug industry lobby.

Surely both men's decisions while in office were influenced by the desire to please their potential future employers. And that undue influence explains why the drug legislation is such a mess.

The most important problem with the drug bill is that it doesn't offer direct coverage from Medicare. Instead, people must sign up with private plans offered by insurance companies.

This has three bad effects. First, the elderly face wildly confusing choices. Second, costs are high, because the bill creates an extra, unnecessary layer of bureaucracy. Finally, the fragmentation into private plans prevents Medicare from using bulk purchasing to reduce drug prices.