Clinton eyes drug benefit for all under Medicare

Participants would pay far less than the $90 a month companies charge

June 09, 1999|By David Folkenflik | David Folkenflik,SUN NATIONAL STAFF

WASHINGTON -- Appealing to a large voting bloc, President Clinton plans to propose coverage of prescription drugs for all Medicare recipients this month, promising relief to millions of elderly Americans but confounding many experts who say the plan may not prove financially feasible.

"You can't do this alone," said a skeptical Sen. John B. Breaux, a Louisiana Democrat and author of a rival plan that would significantly recast the entire Medicare program. "You have to reform the whole system."

The plan taking shape would offer a drug plan to all recipients for a monthly fee well below $90 -- roughly the average rate charged the elderly by private firms, White House aides said.

About one-third of Medicare's 39 million recipients have no prescription insurance. Of those who do, many purchase expensive private policies. Lawmakers from both parties generally agree that prescription drugs should be affordable for all Medicare recipients, but many fear the cost to taxpayers.

`It's got to be affordable'

"The cost of the [monthly] premium needs to be significantly lower than $90," said Chris Jennings, a senior White House adviser on health care policy. "It's got to be affordable, both to the beneficiaries and the program."

Clinton would have the federal agency that runs Medicare contract with private firms to help run the prescription program and drive down the price of drugs by buying in bulk.

The pharmaceutical industry has lobbied hard against that provision, arguing instead for an expansion of the managed care part of the Medicare plan, which often pays for prescription drugs. Only 15 percent of Medicare recipients have chosen to enroll in such plans, however, and many health maintenance organizations have withdrawn from the program because they aren't making enough money.

Since Medicare was created as a medical safety net for the elderly and disabled in 1965, the use of pharmaceuticals has become much more widespread and the life span of beneficiaries has increased.

With the plan, expected to be announced after the president returns from Europe, Clinton would wade back into a politically charged issue five months after calling for prescription coverage in his State of the Union message.

In leading a bipartisan commission to address Medicare's long-term financial viability, Breaux and Republican Rep. Bill Thomas of California called for providing the near-poor -- people who earned less than $10,600 annually, or couples whose income was less than $13,300 -- with complete drug coverage. (Medicaid pays for prescription drugs for the poor.)

Middle class unaffected

Their proposal would not reach the middle class, where many elderly are reeling from pharmacy bills and many close elections can be won or lost. With drug costs rising, Democrats say they have found a winning issue for the congressional elections next year.

Although the country's senior citizens constitute 12 percent of the population, they consume 35 percent of prescription drugs. A recent study by the National Academy of Social Insurance found that more than 9 million Medicare recipients pay at least $500 a year for medication, while more than 1.3 million pay more than $2,000.

While there are several contending congressional initiatives -- largely from Democrats -- none would come cheaply. Estimates for various Medicare drug proposals range from about $8 billion to $40 billion.

A triple threat

Medicare faces three major threats in coming years: the continually rising costs of health care, the increased life expectancy of Americans and the aging of baby boomers.

"In politics, you have to put the good with the bad," said Deborah Steeleman, a Republican appointee to Breaux's Medicare commission. "The good is giving seniors a decent way to get drug coverage. The bad is asking them to accept some changes in the program."

But the president has not indicated how he would achieve major savings in the program, Steeleman said, other than signaling how he would temper the cost of the new medication benefit.

Clinton has called for setting aside 15 percent of the federal surplus to shore up Medicare's finances.

Pub Date: 6/09/99

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