Pay more, get less.

ITEM: The Minneapolis Star Tribune bemoaned infighting over competing Medicare reforms. "As Congress labors to complete a $400 billion overhaul of Medicare this fall," said the paper on Oct. 13, "lawmakers say they are trying to help senior citizens with the crushing cost of. prescription drugs. But of course there's another constituency. A good deal of the money ultimately will flow to drug manufacturers and insurance companies that enter tire Medicare market, and it appears that they are influencing the legislation in a way that is not in the best interest of elderly Americans or the taxpayers who help fund Medicare."

The government should order lower costs, said the Star Tribune, contending that the "Medicare program has used volume discounts with doctors and hospitals very effectively to control costs ... and there is no reason it shouldn't do the same with drug prices."

BETWEEN THE LINES: Prescribing a new government entitlement is exactly the wrong way to hold down costs. The Star Tribune also ignores how the current Medicare system has grown sevenfold over original projections. It's on its way to becoming the second largest federal entitlement program. And government estimates of a prescription drug entitlement are no doubt low.

Some private-sector economists peg the price tag of a new drug benefit as high as $4 trillion over a decade. There would be other costs with a drug entitlement, which seems to be reaching the final stages of negotiations on Capitol Hill. Studies of both Senate- and House-passed bills demonstrate that about a third of seniors would lose their current coverage, as they get dumped from employer-based plans. Conservative critics as well as a study by Emory University Professor Ken Thorpe, a former Clinton administration health advisor, anticipate that adding a prescription drug entitlement would result in more than 4 million seniors losing employer-sponsored insurance, while 4.8 million with Medigap insurance would lose that coverage too. This generally mirrors an analysis by the Congressional Budget Office.

Accordingly, as part of the jury-rigging to gain support for passage, many in Congress are pushing what amounts to corporate welfare to pay employers not to damp retirees into the new public entitlement. Previous federal activity has driven up costs to employers, many of whom would love to clear those expenses from their books. This is one reason why ads advocating approval of this new benefit have been appearing in newspapers nationwide. These ads come from groups such as the Business Roundtable and AARR which seemingly represent very different con stituencies but are nevertheless allies for a place at the federal trough.

Skirmishes are being fought over details. Class warfare arguments, for example, have created pressure to install means-testing for beneficiaries--so Bill Gates and Donald Trump don't pay the same as poor seniors for their prescriptions. Federal cure-alls often hurt the alleged beneficiaries. "The biggest losers under the new programs are 76 percent of seniors who already have some form of prescription drug coverage," says Congressman Ron Paul (R-Texas). "On average these seniors spend less than $1,000 per year on drug co-payments and meeting deductible amounts. Under both the House and Senate proposals, however, millions of American seniors will end up paying more out of pocket lot drugs than they do now, while having worse coverage."