Bush's Drug Plan Targets Low-Income Enrollees
By: Source: AARP Bulletin Today Date Posted: 2003-06-23 15:16:29
Shifting budget priorities and political gridlock cloud the outlook for adding a prescription drug benefit to Medicare this year.
"No question about it," says John Rother, AARP director of policy, "passing a comprehensive drug benefit will require a hard struggle."
Meanwhile, a new proposal in President Bush's 2003 budget request focuses on helping low-income beneficiaries through expanded state assistance programs.
In what has been described as a "wartime budget," with the lion's share going to defense and homeland security, Bush proposes $190 billion over 10 years to reform Medicare, finance a comprehensive drug benefit and pay for other changes.
More than a third of that amount—$77 billion—would be earmarked for low-income assistance. The money would be given to the states to expand drug assistance programs.
In effect, the proposal offers a second strategy for providing interim relief from high drug prices, White House aides say, in addition to the Medicare drug discount card Bush proposed last year.
Administration officials stress the new proposal doesn't mean the president is backing off from a benefit that would cover all Medicare beneficiaries. "We are committed to doing a comprehensive drug benefit," says Medicare chief Tom Scully. "In the meantime the most vulnerable people without drug coverage will get something, while Congress decides what the bigger benefit will be."
Politically, critics say, the plan will give Republicans an opportunity to tell voters in this year's election campaign that their party has tried to make some progress on the contentious issue of prescription drugs.
But Bush's new proposal isn't a sure thing in this year's Congress. Many Democrats are skeptical. The president "is trying to finesse the fact there won't be a drug benefit" this year, says Rep. Pete Stark, D-Calif., a member of the powerful Ways and Means Committee.
Democrats, along with many Republicans, say the $190 billion sought by Bush is insufficient to finance even a modest comprehensive prescription drug benefit in Medicare.
In fact, leaders in both political parties say that at least $300 billion—the amount Congress set aside in its 2002 budget—will be needed for a drug benefit alone.
"Republicans in the House and Senate, I think, are going to go for $300 billion," Sen. Chuck Grassley, R-Iowa, ranking member on the Senate Finance Committee, told reporters.
But administration officials insist the $77 billion earmarked for the states would go a long way toward helping low-income beneficiaries pay for drugs.
Under this new proposal, Medicare would pay 90 percent of a state's cost of expanding drug coverage for beneficiaries with incomes up to 150 percent of the federal poverty level (currently up to about $12,700 for individuals, $17,000 for couples).
States could use this 9-to-1 dollar match for new or existing pharmacy assistance programs or use it for the federal/state health program Medicaid. To qualify, a state would already have to be funding its Medicaid program up to 100 percent of the federal poverty level. Only 17 states and the District of Columbia now do so.
Medicare's Scully says the plan could eventually cover 3 million people. It is a "totally different concept," he adds, from Bush's proposal last year to give grants to the states for such programs. That plan was greeted with little enthusiasm by Congress and many states.
But, critics say, the new proposal is similar to the old one in that it would likely help only the two dozen states that have already enacted pharmacy assistance programs.
"It will just replace those state dollars with federal dollars, and most states probably wouldn't use it to expand coverage because they are under so much fiscal pressure," says AARP's Rother. "We're in favor of programs to assist low-income people, but this one may spend a lot of money without actually helping anyone get drugs who isn't already being helped."
So what are lawmakers going to do about the cost of drugs this year? The House could pass a Republican bill that Bush favors by Memorial Day, analysts say. But that could include sweeping changes in Medicare that are opposed by most Democrats and are unlikely to pass the Senate. "The politics of this may get hung up on Medicare reform more than on prescription drugs," says Rother.
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