Dispatches > The Buzz

Ups & Downs of the Week

Issue: "Who'll be king of the Hill?," Oct. 7, 2000

Poverty: Liberal lobbyists claimed in 1996 that welfare reform would make more people poor-but Census Bureau statistics released on Sept. 26 showed the lowest level of poverty in two decades. In 1999, some 32 million people lived below the poverty line, defined as $17,000 for a family of four. That line is a moving figure, amounts of reported income should be viewed skeptically, and national measures of poverty are blunt instruments anyway, for costs of living vary enormously. But within the conventional assumptions, it's still noteworthy that 2.2 million fewer people were poor last year than the year before. The median household income in 1999 rose to almost $41,000. Blacks averaged a gain of $2,000 per household, Americans of Hispanic origin $1,800 per household, and whites $700 per household. Medicare ripoffs: A study by the House Commerce Committee found that the federal government overpays nearly a half-billion dollars each year to doctors for dozens of drugs through Medicare. According to investigators, drug companies charge doctors less than wholesale prices to encourage them to prescribe their drugs. But the government reimburses doctors at the wholesale rate, giving doctors massive profits. The practice is legal, but reimbursement methods are "so deeply flawed that they invite rampant abuse," wrote U.S. Rep. Thomas Bliley (R-Va.) in a letter to Nancy-Ann Min DeParle, administrator of the Health Care Financing Administration, which runs Medicare. The report found that doctors overcharge Medicare by $447 million per year for drugs. The drugs mainly are used to treat AIDS and cancer.

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