Parties Both Favor Medicare Drug Benefits, Differ on Details

The two political parties are at odds over a Medicare prescription drug benefit, and House and Senate Republicans cannot even agree among themselves.

But just about all major voting blocs are now in favor of some kind of drug benefit for the elderly, suggesting that Congress has started the process of making a historic expansion in Medicare.

Underpinning the congressional proposal is budgeting by the GOP of $40 billion over the next five years to pay for a drug benefit--roughly the same amount that President Clinton wants to allocate.

“Congress has created an expectation among seniors that a drug benefit is coming. They’ve put the funding aside. They’ve got the ball rolling. So they can’t turn back--it’s a political juggernaut,” said Tom Scully, president of the Federation of American Health Systems, which represents for-profit hospitals.

However, Scully, who as a member of President Bush’s domestic policy team worked on an effort by Congress to cover prescription drugs more than a decade ago, said that he believes such complex legislation has little chance of becoming law in an election year.

Sharing his sentiments is Martin Corry, chief of federal legislation for AARP, the chief lobby group for retired Americans, who similarly worked on the last effort to push prescription drug coverage for the elderly through Congress. That effort, known as catastrophic health coverage, was repealed one year after it became law when seniors complained that it was too expensive.

Corry cautioned that the technical complexity and cost of a drug benefit, as well as the many interest groups with sharply different ideas about how the benefit should be designed, will make for a tough fight.

Notably, there is little agreement among pharmaceutical companies, insurers, health maintenance organizations and beneficiaries over how to create a drug benefit that is affordable for the elderly and other taxpayers but avoids the kind of government regulation, such as price limits, that are anathema to the pharmaceutical industry.

If there is no price regulation at all, it would be a stark exception within Medicare. Every other Medicare service--such as hospital payments, doctor’s services and nursing homes--are reimbursed according to strict government price schedules.

The scramble by lawmakers to be seen as supporting a Medicare drug benefit shows that Republicans have become convinced--as Democrats have been for some time--that this is a winning political issue.

House Republicans on Wednesday became the latest to unveil a plan. Their proposal would entitle the elderly to buy into a stand-alone prescription drug insurance program, pay all of the cost for recipients with incomes below about $11,000 and reduce drug coverage costs for higher-income seniors.

“No American should be forced to chose between putting food on the table and taking lifesaving prescription drugs,” said House Speaker J. Dennis Hastert (R-Ill.).

Most details of the GOP plan have yet to be worked out. And, although the insurance industry was careful not to criticize the proposal, it has expressed deep doubts about whether it would make sense for the industry to sell such policies, which they fear would not be profitable.

White House officials blasted the Republican plan, saying that its approach--in contrast to President Clinton’s--would offer little help to any but the poorest seniors and would be most beneficial to drug companies and insurers.