Prescribing the right plan

June 01, 2000|By Benjamin L. Cardin

CONGRESS has the opportunity this year to modernize Medicare to include outpatient prescription drug coverage.

Two competing bills are being developed in Congress, one by House Democrats and another by Republican House Speaker Dennis Hastert. The American people deserve a clear understanding of the differences between these two approaches.

The Republican plan depends on beneficiaries choosing a drug plan offered by private insurers. Such market-based strategies to provide health coverage to seniors have failed repeatedly in the past. The failure of the private market to offer affordable health care to seniors led to the creation of Medicare in 1965.

In the past two years, we have witnessed the disintegration of Medicare+Choice, another market-based approach to insuring Medicare beneficiaries.

This program was created in 1997 to provide seniors with access to HMOs, PPOs and medical savings accounts. However, in Maryland and across the country, private health plans are withdrawing from the program, leaving seniors with fewer choices today than in 1998.

Mr. Hastert's proposal has been deemed unworkable by the very insurers on which it depends. The Blue Cross and Blue Shield Association, representing 49 plans nationwide that cover 74 million Americans, described the plan as "a false hope" that would be unaffordable for most seniors. The president of the Health Insurance Association of America added that Mr. Hastert's plan was based "on unrealistic assumptions."

For 54 percent of America's seniors who lack drug coverage, the Republican proposal offers limited assistance in paying premiums. Furthermore, it does nothing to keep down the rapidly rising costs of drugs. A real drug benefit must provide beneficiaries with discounted prices similar to those available to large purchasers, such as HMOs and federal and state governments.

America's seniors should be guaranteed affordable, reliable coverage for prescription drugs as part of their Medicare benefits. Unlike the speaker's plan, the Democratic plan meets this test.

The Democratic plan makes voluntary coverage available to all Medicare beneficiaries. Those who choose to participate will pay about one-third of the monthly premium, about $26 a month, with Medicare paying the other two-thirds.

In addition to helping pay co-payments and premiums for low-income seniors, the plan also would pay half the cost of each prescription, with no deductible. The benefit will cover up to $2,000 of prescription drugs in 2002 and gradually increase to $5,000. It also dedicates $35 billion over the next decade to help provide for beneficiaries with higher drug costs.

The Democratic plan guarantees access to medications, helps with the costs of drugs and, most important, places a drug benefit where it belongs -- in the basic Medicare program. Seniors would be able to obtain any drug as long as their physician certifies it as medically necessary, and they would be able to take advantage of negotiated drug discount rates.

Medicare needs to be modernized to provide a prescription drug benefit. The question is how to make it available at a reasonable rate to the vast majority of seniors. We know that Medicare works; it has a track record.

We need to ask ourselves: Do we want to provide a prescription drug benefit in a program that works, or do we really want to force seniors to negotiate with private insurance companies for a benefit that we all say they deserve?

Benjamin L. Cardin is a Democratic member of the House of Representatives from the 3rd Congressional District and is active in formulating health care policy.

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