The Fight Over a Medicare Drug Plan

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Rep. Thomas, (R-Calif.) discusses Medicare and prescription drug legislation

Everyone in Washington seems to agree: the nation's seniors need better prescription drug coverage, and quickly. The major point of debate between Republicans and Democrats: how much the whole thing should cost — and exactly what should be covered.

The price tags for coverage plans range between gigantic and elephantine. Monday, House Republicans, led by Rep. Bill Thomas of California, introduced a plan that would rack up a $350 billion bill over ten years, with $300 billion earmarked for the prescription program itself. The rest would go to subsidize health care practices that agree to serve Medicare patients — a community that's dwindling thanks to rising costs of care and plummeting Medicare reimbursement rates.

The figures are higher across the congressional aisle: House Democrats have a plan that would cost $800 billion over a decade, and last week, Senate Democrats offered a blueprint that would run about $500 billion to implement. Meanwhile, the White House wants to keep the bill under $200 billion. Now lawmakers are wondering if Congress has the political will to up the President's ante.

In an election year, if anyone nudges the President's hand on this legislation, it won't be Congress — it will be the voters. No politician wants to start off the election cycle with a "victory" over extremely expensive — and extremely popular — prescription drug benefit legislation. So if Republicans prevail with a slightly less costly plan, they?ll spin it as a triumph of responsible government over the whims of spendthrift Dems. And if the Dems are the big winners, we?ll get an earful about the victory of the people over tightwad Republicans.

Not surprisingly, there's a lot of support for the most generous of the plans. Ron Pollack, the executive director of Families USA, a nonprofit, non-partisan organization based in Washington D.C. that advocates "high-quality, affordable healthcare for all Americans," issued a statement supporting the House Democrats' $800 billion plan. Does this vote of confidence come at the exclusion of other plans? "Certainly to the exclusion of the GOP plan," says Families USA spokesperson Jennifer Laudano, who adds there are simply "too many holes" in the House Republicans' proposal. The AARP, the nation's largest lobbying group for seniors, is also lukewarm on the GOP proposal, worrying that it just doesn't provide enough money to cover enough people.

Chances are, no one will be completely satisfied with any one of the plans: each would require some kind of monthly premium payment, as well as a deductible of varying amounts. The Senate Democrats' plan, for example, would charge $25 monthly but have no deductible, while the House Republicans call for a $35 monthly fee and a $350-per-year deductible. Prescription coverage specifics are also variable, ranging from the government paying 80 percent of the first $1,000 spent and 50 percent on the next $1,000 (House Republicans) to requiring a co-payment of $10 for generics and $40 for name brand drugs (Senate Democrats).

For those on the business side of the issue, the emphasis is on balance. John Jones, vice president of legal and regulatory affairs for Prescription Solutions, a pharmacy benefit management company argues for the middle ground. "We need a more generous prescription plan but we also need to control the dispensation of drugs," he says. He advocates pushing generic alternatives to high-profile, high-cost name brand drugs, and urges everyone to be realistic. "This isn't a giveaway for everyone who says, 'I want no deductible and all the drugs I've ever wanted.' The country could never afford that — so Congress is trying to put together something that's sustainable."

Sustainability is in the eye of the beholder — and Democrats and Republicans have very different ideas of how much money is required to guarantee prescription coverage. Andrew Rettenmaier, an economist at Texas A&M University who specializes in analyzing Medicare policy, believes we need to prepare ourselves for the inevitable sticker shock of prescription drug coverage, and thinks the best way to do that is to imagine what might happen if we didn't create coverage in the first place. "Medicare currently covers about five percent of what seniors pay for drugs," Rettenmaier says. That means 95 percent of the cost has to be picked up by private insurance and out of pocket payments from seniors. Real coverage, he continues, "is going to be expensive," and it's going to be a drain on federal coffers. And in a country that's aging by the day, that price is just going to keep going up.