Newt and Medicare Part D

One of the best looks at Newt Gingrich’s little-examined post-Speaker career* comes from Tim Carney, who has sources talking about the 2003 Medicare Part D push. Gingrich, according to Carney’s sources, was benefitting from PhRMA money going into his new Center for Health Transformation. He paid back the favor.

While the Bush White House and the Republican congressional leadership supported a bill creating a new entitlement for all seniors, Washington conservatives mostly opposed the bill. Gingrich went around Washington at the time plumping for the bill to free-market groups and activists.

“In the height of the debate,” one conservative opponent of the bill told me, “Newt was calling around” selling the bill as a great conservative measure even though it was a new federal entitlement.

This isn’t just an anonymous source talking. On November 20, 2003, Helen Dewar published a story in the Washington Post about the stances conservatives were taking on the bill.

Former House Speaker Newt Gingrich pitched in yesterday to allay conservative Republicans’ concerns about the $400 billion bill to redesign Medicare, part of a mounting effort by the bill’s backers to win over skeptics and secure passage within a week.

As Gingrich extolled conservative features of the bill to House Republicans, key Senate supporters from both parties urged rural lawmakers to back it, calling the bill an unprecedented chance to get more Medicare money for rural doctors and hospitals.

… Gingrich, the political firebrand who led the Republicans’$2 1994 takeover of the House, addressed conservative members in a closed-door meeting. According to some who heard his remarks, he cited competition, cost containment and the savings accounts as major achievements. Gingrich, who made Medicare reform a principal goal of his GOP “revolution” in the early 1990s, was challenged by some in the meeting, but others indicated he was persuasive.

Later, on November 29, Gingrich’s name appeared on a letter to the Post.

In his Nov. 18 op-ed column E. J. Dionne Jr. suggested that the Medicare bill will cause costs to rise while millions of seniors lose coverage and the rich benefit. Not so.

For the first time, at a reasonable price, Medicare recipients will have access to a prescription drug benefit. Low-income seniors will be helped by a $600 yearly subsidy, and all seniors will receive a Medicare discount drug card next year. Also, by 2010 the bill allows private demonstration plans in six test markets to compete with Medicare based on a bidding process, rather than arbitrarily set prices. Beneficiaries are protected from possible volatility.

For the first time, those who can afford to pay more – the 5 percent with incomes of more than $80,000 – will pay more.

This bill also deals with the failure of the third-party-payer system by creating portable health savings accounts that accumulate money, earn interest, carry over from year to year and can be used to pay for qualified medical expenses, all tax-free. Any American can have a health savings account.

Contributions of as much as 100 percent of the health plan deductible also can be made either by an individual’s employer or by family members, with a maximum pretax contribution of $2,500 for single individuals and $5,050 for families. Those 55 and older will be able to make extra contributions of as much as $500 annually ($1,000 by 2009) and can purchase health care policies with no required minimum deductible.

This bill returns decision-making authority, insurance ownership and health dollars to individuals. It will promote competitive market dynamics in health care, thus creating downward pressure on health care costs.

It’s true to say that Gingrich never “lobbied” for the bill. Lobbying is a distinctive career; you have to register to conduct it. Gingrich merely used his status as a conservative icon, with close ties to many House members and a well of respect with others, to advocate for policies. He was, at the same time, collecting money from the GSEs and the health care industry – not knowing the exact details of what they wanted, we can only assume how this influenced what he was doing and saying.

*Newt’s career since 1998 can be divided into two stages. From 1999 to 2004, he slowly built up an empire of influence, centered around the Gingrich Group. His “cultural” activity in this period was fairly closely tied to economic interest. For example, he only wrote one nonfiction book – Saving Money, Saving Lives – in these years. It came out in 2003, as he launched the Center for Health Transformation. From 2005 to now, he’s written 10 non-fiction books, produced a series of films, and commented more frequently on Fox News.