Senate Takes Up Medicare Drug Benefit

June 16, 2003
Congress is closer than ever before to adding a prescription drug benefit to Medicare -- something both parties and the White House say they want. The Senate is likely to act on the $400 billion measure this week, sending it to the more partisan House. Yet no one is happy with the plan, which both liberals and conservatives see as flawed.

The measure would pay 50 percent of drug costs after a $275 yearly deductible. When the costs reached $4,500 the beneficiary would be responsible for all drug costs above that amount until spending reached $5,800. Medicare would then pay 90 percent of the costs.

Not everyone has bought into the compromise, however. The Alliance for Retired Americans says it will launch a massive grassroots campaign to defeat the bill, which it calls "a disaster and not acceptable as a remedy for the prescription drug crisis facing older Americans."

Conservatives say the proposal creates a new entitlement without changing the structure of Medicare to create a new marketplace of competing private health plans, which they contend would be more efficient than the traditional program.

Liberals say the measure doesn't go far enough. Sen. Tom Harkin, D-Iowa, calls it "a cruel hoax on the elderly" but concedes he will probably end up voting for it. Sen. Edward M. Kennedy of Massachusetts supports the measure as a first step that can be expanded as conditions permit.

Both sides are in a difficult position politically. With Republicans controlling the Congress and White House, they fear that failing to pass a Medicare drug bill this year would spell trouble at the polls next year. Most Democrats want a more generous bill but don't want to appear to be obstructionists.

President Bush, who pledged to provide some kind of drug benefit to seniors, would still prefer to provide a more generous benefit to those who convert to private health plans but has signaled his willingness to go with one drug benefit for all Medicare enrollees if that is the price of passage.

The Senate takes up the measure this afternoon and if all goes well, an effort that has been underway for more than five years may finally be on the path to the Rose Garden, although opposition by the Alliance for Retired Americans, a labor group, could spell trouble.

"Budget officials are now predicting that Medicare patients would pay about $1,200 in premiums, deductibles and other charges before the alleged drug benefit would exceed what they pay out of pocket," warns ARA President George J. Kourpias.

"In fact, it is estimated that about 35 percent of all Medicare beneficiaries would spend more than they receive. If that is not outrageous, I don't know what is. The benefits are not scheduled to kick in for three years," he said. "Until then, they will be offered discount cards which do very little to solve the crisis confronting older Americans."

A plan being supported by House Republican leaders "is even worse than the Senate plan," said Alliance Secretary-Treasurer Ruben Burks. "Once again, they are going to try to pit one group of seniors against another by requiring higher-income Medicare recipients to pay more for medicine."

"We went through this with the catastrophic bill in the late '80s, it didn't work then and it won't work now," Burks said.