Who might get lower prescription-drug costs?

Bush plan targets aid to poor seniors, but Democrats want broader coverage.

Rolling out proposals as if on a public-policy assembly line, the White House yesterday unveiled its plan for a prescription-drug benefit - the second major legislative initiative in less than two weeks.

The plan, called an "immediate helping hand," would provide states with block grants so they could cover the cost of prescriptions for low-income seniors. A signature campaign promise of George W. Bush, the plan is meant to provide temporary relief from skyrocketing drug costs while Congress and the White House tackle the overall issue of Medicare reform.

But unlike last week's blueprint for education reform, the drug-benefit proposal is being met with considerable skepticism from both Republicans and Democrats on the Hill. And with both sides criticizing the plan, it may well serve to restart debate on the contentious issue of Medicare reform.

"This is going to be the most difficult healthcare issue that any administration will undertake for the next four to eight years," says Steve Jenning, vice president of Steelman Health Strategies, a lobbying firm that has been involved in the Medicare debate.

Already at odds

That much was clear when Health and Human Services Secretary Tommy Thompson went through his nomination hearings recently. At that time, Sen. Charles Grassley (R) of Iowa, chairman of the powerful Senate Finance Committee, suggested Mr. Bush "should be very flexible" and not insist on his proposal.

What disturbs Republicans, as well as some key Democrats, is that if Congress passes a temporary drug benefit now, it may lose the impetus to fix the antiquated and costly Medicare system itself. Additionally, they argue, a program as huge as a drug benefit - which could potentially serve all of Medicare's 39 million beneficiaries - can't simply be considered in isolation.

Democrats are also concerned about the Bush idea of only covering low-income seniors.

"Medicare is a universal program. Drug coverage should be as well," says Michael Siegel, spokesman for Sen. Max Baucus of Montana, the ranking Democrat on the Senate Finance Committee.

Healthcare policy experts, meanwhile, are concerned about the wisdom of giving block grants to states.

Only about 14 states have plans in place that could take advantage of the administration's proposal, says health economist Marilyn Moon of the Urban Institute here. The best prepared are New York, New Jersey, and Pennsylvania, she says, but other states would have to come up with programs of their own to even receive the federal dollars - a proposed $48 billion over four years.

"I think it's very difficult to convince states to gear up for a program that is potentially underfunded and going to be terminated," says Ms. Moon.

Pressure to find a solution

But the pressing nature of the problem, combined with the fact that this was a high-profile campaign promise from both sides, may serve to push Congress toward a solution this year.

Prescription drugs have become the fastest-rising cost in medical treatment. More than a third of the elderly lack a drug benefit, and that's likely to increase as more and more baby boomers move into their senior years, and live longer.

"We shouldn't be surprised if we find some way to do this," says Moon. "All these men and women promised prescription drugs [in their campaigns], and they will feel the pressure to deliver."

At this time, however, there is no consensus in Congress behind any particular plan.

Partisan approaches

Generally, Democrats support a universal drug benefit within the Medicare system. Republicans support a benefit outside of Medicare, in which seniors have access to competing insurance plans while the federal government subsidizes their premiums and co-payments.

Meanwhile, there's no agreement on whether to tackle just the drug-benefit issue on its own, or go the distance and deal with the much bigger problem of reforming Medicare, which is expected to go bust in 2025.

One place to watch for signs of consensus is a bipartisan plan being fashioned by Sen. Ted Kennedy (D) of Massachusetts and Senator Grassley that would include universal coverage. But while some senators may be arguing for a drug benefit only in the context of overall Medicare reform, that's not Senator Kennedy's view.

"We have the ability, certainly the need, to move very quickly on this," says Jim Manley, Kennedy's spokesman.

Acting now

That is also the position taken by the White House, which worries that present needs of seniors will be pushed aside while Congress wrangles over fixing the whole system.

"There's been inaction on this for too long, and needy seniors are still waiting for prescription-drug coverage," an administration official said.

On the other hand, if Congress can quickly move to reform Medicare, the administration would be open to working in the drug benefit that way.

"The president is encouraged by conversations with congressional leaders that bipartisan reform may happen sooner rather than later," the official said.

(c) Copyright 2001. The Christian Science Publishing Society

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