Finally — A Medicare Drug Benefit? Republican-led Proposal Would Create A Role For Private Health Plans

While congressional leaders appear closer than ever to giving older Americans a Medicare prescription drug benefit, some Democrats complain that the Republican-led plan falls short of meeting senior citizens’ needs.
“I know I will be actively pushing the bill because it conforms to the principles I laid out of prescription drugs for our seniors: choice for seniors and accountability for the Medicare plan,” President Bush said. However, Sen. Edward M. Kennedy counts himself among the unconvinced.

“I believe it will not pass the U.S. Senate in its current form,” Kennedy said, despite the fact that GOP lawmakers have come to an agreement with at least two Democratic senators, John Breaux of Louisiana and Max Baucus of Montana.

As legislators push to produce a compromise, and with the proposal gaining key support from the American Association of Retired Persons (AARP) and the American Medical Association (AMA), the prospects of a drug benefit seem closer than ever before. But when politics and medicine mix, the result is often anything but predictable.
Involving the HMOs

The legislation, in its current state, would create a prescription drug benefit for 40 million elderly and disabled Medicare beneficiaries beginning in 2006. Components of the plan include a monthly premium of $35, a $275 deductible, and a coverage gap combined with protection against catastrophic expenses.

The bill would also give private health plans a new role in Medicare, encouraging them to offer seniors the option of receiving coverage under managed-care plans. Under that system, seniors would be encouraged to use certain doctors, but they could receive care from other doctors for an extra charge.

Democratic leaders jumped on the latter aspect of the proposal, anxious for an opportunity to reclaim an issue they have traditionally used against Republicans.
California’s Nancy Pelosi, the House minority leader, called the plan bad for seniors and good for special-interest groups. “Republicans leaders are giving millions of dollars in windfall profits to the pharmaceutical industry,” she said, “and giving billions of dollars as a slush fund for HMOs.”

Still, Baucus said, “many will reach the decision that this is better to pass than not to pass.”

Meanwhile, the AMA gave a ringing endorsement of the Republican plan.

“We are pleased that the Medicare conferees have reached agreement on an historic Medicare bill that provides seniors with the prescription drug coverage they need and ensures that they have access to a physician when they need one,” AMA President Donald J. Palmisano, M.D. said. “The bill also expands seniors’ health plan choices and improves physician recruitment and retention in rural and underserved areas.”

Meanwhile, the AARP, with its 35 million members age 50 and over — an organization the Bush administration has actively courted with the plan — also gave the bill a tentative thumbs-up.

“We’re going to work to get it passed,” AARP CEO Bill Novelli said, adding that the bill isn’t perfect, “but the country can’t afford to wait for perfect. On balance, it’s the right thing for seniors in America and their families.”

Earlier in the process, the AARP had not taken sides, instead simply encouraging bipartisan participation in hammering out a benefit.

“While we would not support legislation that would jeopardize Medicare for today’s generation of beneficiaries or generations to follow, we have the opportunity now to provide some relief to millions of older Americans,” Novelli said. “If this legislation is not enacted this year, a major opportunity will have been lost, and politics will have triumphed over policy and public health.”

Cost Concerns

Still, the plan — which also creates a $12 billion fund to help managed-care plans take hold with Medicare recipients and includes a tax break for people who purchase health insurance with a high deductible — must still overcome the obstacle of cost. Earlier in the year, Bush imposed a $400 billion, 10-year price limit on any drug-benefit legislation.

Yet, the president was confident last month that some relief is finally on its way to America’s growing senior population.

If it passes, Bush said, it would be “the most significant improvement in senior health coverage in nearly 40 years.”