White House Attacks GOP’s Drug Plan

The White House is criticizing a Republican plan to offer prescription drug insurance to senior citizens as a “Swiss cheese plan” that won’t cover millions of older Americans and will be too expensive for many, particularly women.

“It’s underfunded, unlikely to be available to all [Medicare] beneficiaries and inevitably . . . unaffordable to people with disabilities and probably millions of seniors,” Secretary of Health and Human Services Donna Shalala said Thursday.

The GOP plan, as outlined by House Speaker J. Dennis Hastert last week, calls for private health plans to offer drug benefits and government subsidies to pay drug costs for low-income seniors. While many of the details have yet to be worked out, Republicans said the plan would lower drug prices, give seniors more coverage choice and help the neediest Americans.

The White House has its own plan to provide prescription drug coverage under Medicare, the federal health program for the elderly and disabled. With many lawmakers out of town for the Easter recess, administration officials took the opportunity to point out what they called flaws in the GOP plan and show how their plan would help more people.

“To us it still seems like a Swiss cheese plan with more holes than substance,” said Gene Sperling, head of the president’s National Economic Council, at a White House briefing.

Republicans accused the administration of jumping the gun with its criticism, saying that when all the fine print has been worked out they will have a comprehensive plan for all seniors.

“The White House is taking shots in the dark,” said John Feehery, Hastert’s spokesman. “We are still fleshing out the details of the plan. We believe we are going to have a good plan for all seniors.”

Sperling said the GOP plan to provide subsidies to cover drug costs for seniors at the poverty level would leave out 6 million Medicare beneficiaries who have no drug coverage but have incomes above the poverty line--which he calculated at about $12,500 a year for singles and $16,875 per couple.

Republicans are said to be looking at provisions that would limit seniors’ out-of-pocket costs to between $2,000 and $3,000 a year and would establish a cap at which the government would step in and bear the cost of drug expenses.

The White House plan, which will cost $195 billion over 10 years, would provide drug benefits to all 39 million Medicare beneficiaries, paying up to $1,000 in drug costs annually for a $26 monthly premium.

It is not known what premiums would be under the GOP plan. Sperling predicted drug benefits provided by private insurers--a cornerstone of the GOP plan--would probably end up being too expensive for many Medicare beneficiaries. The coverage would work much like drug benefits under private supplemental policies such as Medigap, which charge high premiums that increase as policy holders age, he said.

This aspect of the Republican plan “should be particularly a concern of older women” because the majority of seniors over age 85 are women. “Building a drug program off that model has very serious concerns,” he said.

He also questioned whether the Republicans will commit enough money to a prescription drug program. GOP lawmakers have set aside $40 billion in their budget proposal for Medicare over the next five years. Hastert has said most of that would go toward the drug program, but details have not been announced.

Proposed GOP tax cuts of $792 billion over 10 years leave little room for investments in a drug program unless spending cuts are made in other programs, Sperling suggested.

“Their tax cut is filling up so much room that it’s very difficult for them to show how they can have a significant drug program without either reducing the tax cut or relying on discretionary cuts that are . . . unrealistic,” he said.

Even while they took shots at the GOP plan, administration officials said they wanted to work with Republicans to come up with a compromise. They said they have been in discussions with members of a Senate finance committee, which has held a number of hearings on prescription drug coverage.

“We’re not saying its our way or the highway,” said Sperling.