Drug Wars: A Capitol Prescription

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Drug Wars: A Capitol Prescription
by James Hall

"The plan is sound. It is in Medicare, it is an entitlement program and it is a guaranteed benefit." Rep. Bill Thomas, R-Calif., architect of GOP plan "This provides more political coverage for the Republicans who voted for it than insurance for seniors who need to buy medicine."
-President Bill Clinton

Not all drug wars take place in the distant jungles of Columbia or on the mean city streets. Some of them take place between politicians battling for powerful interests. Right now it's war in Washington as Republicans and Democrats scrap over the size and extent of Medicare's new prescription drug entitlement. Yes, I did say entitlement, for neither party is shrinking from calling it that. Democrats, for their part, have never backed away from federal entitlement programs and Republicans don't either-not when they include large blocks of committed voters. Seniors at or near Medicare age constituted 25% of the vote last election cycle. That's enough clout to make any party toss out its "Contract With America." Last week the House voted along party lines to pass the Republican prescription drug program, a bill that now goes to the Senate. The question is whether the Republican entitlement program will do much good for seniors or simply serve as a fig leaf to cover the GOP's leadership's unwillingness to permit a vote on a clearly superior Democratic plan.

Democrats favor an across-the-board prescription drug program as part of Medicare itself that would cost $100 billion over five years. It would cost more by keeping costs to seniors down-lower monthly payments, a lower deductible, and lower ceilings on total yearly prescription drug payments. Republicans want a smaller, $40 billion program to fill in some of the gaps that force some seniors to choose between filling prescriptions or paying for frills like food, rent and electricity.

While both plans are voluntary, the Democratic plan would feature deductible payments from Social Security checks while the Republican plan would require that insurance companies run the plans, paid with federal funds plus premiums, copayments, and deductibles that seniors would pay themselves.

With prescription drug costs rising through the roof, a prescription drug program of some kind is now necessary. While Medicare pays for doctor's visits, tests, and diagnoses, it doesn't pay for the advanced medications physicians currently prescribe. The cost of today's prescription drugs eats up a significant amount of most retirees' fixed incomes. Consider the cost, if you will, of a drug called Embrel for rheumatoid arthritis, a crippling, painful disease. Embrel is extremely effective, but at $12,000 a year for a prescription, is well above the means of retired men with the median incomes of $18,155 or retired women with median incomes of $10,155. Even less expensive drugs, when taken in numbers as many seniors must, can add up to large annual bills.

But it's this expense that pits the Republicans against the Democrats. On the Republican side are the prescription drug companies themselves, who have had it all their way when it comes to price increases that have far exceeded inflation in recent years. These drug multinationals are spending over 200 million dollars (Guess who picks up the tab for that?) on ads and lobbyists to persuade voters not to go with the Democratic Medicare solution. Their reason: they don't want to face an organization like Medicare with enough clout to dictate drug price reductions.

Republicans want private insurance companies to run the their plan, but so far the insurance companies themselves are unwilling to commit to run it for what the Republicans want to pay. The insurance companies figure that only seniors who need prescription drugs are likely to enroll in a drug insurance program, making it a money-losing proposition for them. Even if Republicans can find companies willing to extend coverage, figures by the nonpartisan Congressional Budget Office also indicate that the Republican plan would be so expensive for seniors that one-quarter of them may not be able to afford to enroll in it.

While partisan bickering is certainly par for the course this close to November, leaders of both parties ought to stop playing politics with this issue and do something to meet the needs of older Americans living on fixed incomes. It only makes sense to include a voluntary prescription drug benefit as part of the Medicare itself and make it as simple and inexpensive as is reasonable. The Democratic plan, while more expensive, is practical, while the Republican plan is based on uncertainties-will the insurance companies be interested in it? Will it offer sufficient coverage to make a difference? However, the Republican leadership may not care whether its program is unworkable or not. The advantage for the Republicans now is that they can say they have a prescription drug program and that they all voted for it, even if it's the lesser plan available. Meanwhile the drug wars continue on, with older Americans as their first casualties.