01-26-2004, 01:38 PM
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Philly guy in the 'burbs
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Join Date: Sep 2003
Location: PA
Posts: 4,029
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Why the recent Medicare Bill falls short
Here is a recent NY Times Op-Ed piece, that I believe points out some significant flaws in the recent medicare bill, and what needs to be done to correct it.
Here is a link and the article:
http://www.nytimes.com/2004/01/25/op...25SUN1.html?th
Quote:
Patches for the Drug Program
Published: January 25, 2004
In the weeks since the Medicare prescription drug bill was signed into law, the changes that need to be made in this vital legislation have become increasingly apparent. It's not likely that Congress will act in a political year. But Democrats who criticized the bill should lay markers down now on what has to change, and those amendments should be made as soon after the election as possible.
The legislation was a major achievement, bringing Medicare into the modern era by providing coverage for outpatient prescription drugs, an indispensable part of today's medical care. That is why this page supported the new program even though its coverage is limited and it will cost some $400 billion over 10 years, a huge bill to absorb when budget deficits are looming far into the future. But the fine print contains provisions that may prove a rude shock to many beneficiaries, and a number of flaws that need to be fixed.
One nasty surprise is that even the limited drug coverage initially provided will diminish substantially over time, making it less and less affordable to elderly people living on low fixed incomes. Anyone who followed the rancorous Congressional debate knows that the new program has a huge coverage gap, known as a "doughnut hole," that exposes many beneficiaries to $3,600 in out-of-pocket costs before catastrophic coverage kicks in. That hole makes no sense from an insurance perspective but was intended to keep the program's costs from soaring completely out of control. Over time, as revenues allow, the hole should be plugged.
Less well known is the likelihood that the drug coverage will actually become worse with each passing year. The premiums, deductibles and out-of-pocket expenditures will all increase rapidly, tied to increases in per capita drug expenditures under Medicare. By 2013, for example, the out-of-pocket spending required before a person qualifies for catastrophic coverage will probably be $6,400, well above the $3,600 required in the first year. That could be devastating for those struggling to survive on Social Security benefits, which will increase much more slowly. Ideally, the charges for Medicare drug coverage should increase at the same rate as Social Security or slow-moving consumer price indexes. Such a change would be costly. But it can be paid for by repealing President Bush's ill-advised tax cuts, or allowing them to expire as scheduled.
Drug prices must also be controlled. Unfortunately, the most glaring fault in the bill is its failure to employ the strongest weapon for reining in drug costs. As the political price for passing the bill, Congressional Republicans inserted language prohibiting the Medicare program from using its substantial market power to negotiate low prices from the drug companies. Instead, the program will rely on private insurance plans or pharmacy benefit managers to negotiate. That was a mistake. The traditional Medicare program already sets the prices it will pay to hospitals and doctors. There is no good reason it should not have the power to demand low prices for prescription drugs as well.
The ban on government intervention reflects the Republicans' aversion to government price controls, but it's also a testament to the lobbying clout of the drug industry, a major patron of the Republican Party. Democratic leaders have introduced bills to allow Medicare to negotiate directly, but that will be a tough sell in a Republican Congress that opposes any changes before the law has had a chance to work. The AARP has sensibly suggested that Congress should allow the government to negotiate drug prices if private efforts fail to produce big discounts. We fervently hope the private approach can control drug costs, but Congressional Republicans should be challenged to accept such a trigger.
Liberal critics have suggested a number of changes that are worthy of consideration, such as easing the assets test on lower-income beneficiaries; allowing supplementary policies to fill in the doughnut hole; authorizing imports of cheaper drugs from Canada; and reducing the large subsidies offered to private plans to encourage their participation, in that way freeing up money to improve drug coverage. President Bush, in his State of the Union address, seemed to lay down a warning against tinkering with the program. "I signed this measure proudly," he said, "and any attempt to limit the choices of our seniors, or to take away their prescription drug coverage under Medicare, will meet my veto." But the amendments this bill needs would generally improve drug coverage. Critics of the Medicare drug program should advance their proposals in Congress and dare the president and Republican leadership to stiff the elderly as the election approaches.
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