Showdown on Medicare

Senate approval of legislation to provide Medicare coverage of catastrophic expenses for hospital care, and also for some prescription drugs for persons not in hospitals, is expected in mid-October. That would clear the way for a conference committee to resolve differences with the House bill, passed last summer, and for final congressional action before the end of the year--a great step forward in improving health care.

Serious obstacles remain, however. The Reagan Administration, which supports the concept of providing the additional hospital protection, is opposed to additions made in the House--particularly provisions for some coverage of outpatient prescription drugs. And pharmaceutical manufacturers have mounted a massive campaign to strip the bill of any drug provisions except for people in dire economic straits.

There is no question that caution is needed in drawing up the final legislation so that it will not pose an untoward financial burden on Medicare recipients, who will be paying for the added coverage, or become in future years a drain on the federal budget. Sen. Lloyd Bentsen (D-Tex.), chairman of the Finance Committee that has passed a basic bill for catastrophic hospital care, has noted, however, the tendency of the Reagan Administration to exaggerate the potential costs in its zeal to restrict the benefits. And Bentsen has insisted that the legislation can include some prescription-drug benefits and still remain fiscally sound. We agree.

The campaign of the Pharmaceutical Manufacturers Assn. seems to be little more than a wrecking party designed to sabotage any legislation that in any way restrains the manufacturers’ operations. They failed in the House to amend the prescription-drug provisions, and now they are working hard to kill a prescription-drug amendment in the Senate. They probably foresee, in the years ahead, that this provision could lead to controls on how drug money is spent, just as Medicare seeks to control hospital and medical costs. They are opposed even to a modest provision in the proposed legislation requiring doctors to certify the medical necessity of prescribing a brand-name drug when a less expensive generic drug is available. And their lobbyists are arguing that any controls will jeopardize the industry’s research-and-development budget, which they estimate currently at $5 billion a year.

We do not agree with the pharmaceutical industry’s campaign. The campaign of misinformation and fear in belittling generic drugs is not in the public interest. The campaign to keep outpatient prescription-drug benefits from the new legislation is not in the interest of the 30 million Americans who are enrolled in Medicare. This is a rare opportunity to improve the coverage of this excellent health-insurance program, and it should not be lost.

The House bill has two provisions that dramatize the importance of making the most of this opportunity to expand Medicare. One would make special provision to protect the low-income elderly. The other would soften the shocking effect of long-term care, not now funded by Medicare. Under this provision, for the first time there would be some protection from impoverishment for the spouse of someone requiring long-term care. As it is now, in the absence of any Medicare protection, older Americans faced with extended nursing-home care must exhaust their life savings before they become eligible for the benefits of Medicaid--Medi-Cal in California. A husband’s Alzheimer’s disease can leave his wife destitute.

There is a defect in the House bill that is addressed in the Senate Finance Committee bill. The House bill’s sliding scale of premiums for the extended coverage would place a heavy burden on moderate-income families, whereas the Senate, with a steeper scale, would shift this heavier burden to the higher-income Medicare recipients. The Senate plan is more equitable.