Bush Lays Out Proposals for Medicare Reform, Drug Plan
As expected, President Bush yesterday "formally unveiled" his "framework" for Medicare reform and the "first step" of the plan -- a prescription drug discount card, CongressDaily reports (Koffler/Fulton, CongressDaily, 7/12). In a "brief" White House ceremony, Bush outlined the specifics of his prescription drug discount card plan. Under the plan, the federal government would approve discount cards issued by pharmacy benefit managers, which would use the purchasing power of Medicare beneficiaries to negotiate with pharmacies and drug makers to reach discounts of between 15% to 25% off of drugs' retail prices. Participating PBMs would also "steer" seniors to specific drugstores, create preferred drug lists, fill prescriptions by mail and operate telephone call centers to answer consumers' questions. So far, five PBMs -- Advance PCS, Express Scripts, Caremark Rx, Merck-Medco and WellPoint -- have agreed to participate in the plan. To participate in the plan, seniors would pay a one-time enrollment fee not to exceed $25. Medicines would be available to seniors at different prices under different plans, and seniors would be able to select a plan that best suits their needs. Seniors could switch plans up to two times per year. The Centers for Medicare and Medicaid Services (formerly HCFA) would promote the discount cards, as well as "coordinate" and set standards for participating PBMs (Pear, New York Times, 7/13). According to an HHS fact sheet, all Medicare beneficiaries will be permitted to enroll in one of the discount drug plans on or after Nov. 1 and discounts will begin Jan. 1, 2002 (HHS fact sheet, 7/12). Bush administration officials have said that they intend to spend $35 million on a campaign this fall to educate beneficiaries about their managed care and prescription drug choices (Rovner, CongressDaily/AM, 7/13). The New York Times reports that CMS, "which can barely perform all its existing responsibilities," will have "immense challenges" in starting the program by January (Pear, New York Times, 7/13).
Criticism of the Bush plan was "sharp and quick," the Philadelphia Inquirer reports (Chatterjie, Philadelphia Inquirer, 7/13). Rep. Henry Waxman (D-Calif.) questioned whether the discount card would actually produce savings, pointing to a study conducted by the minority staff of the House Government Reform Committee that found five private prescription discount card programs did not produce significant savings (Gerstenzang, Los Angeles Times, 7/13). Senate Majority Leader Thomas Daschle (D-S.D.) "warned" that if Bush "pushes forward" with his discount plan, "broader" Medicare reforms could be delayed (Sammon, Washington Times, 7/13). The debate over a Medicare prescription drug benefit is "already under way in the Senate," where "early signs suggest it will be an arduous effort in which finding a politically acceptable compromise won't come easily" (Murray, Wall Street Journal, 7/13). Sen. Charles Grassley (R-Iowa) said Bush's plan "complements Congress' work" (CongressDaily, 7/12). HHS Secretary Tommy Thompson added that in contrast to most of the Medicare reform bills in Congress, which include a prescription drug benefit that would take "at least two years to implement," the discount card plan would be "immediate because it does not require congressional action" (Green/El-Nawawy, Baltimore Sun, 7/13). Regardless, Senate Finance Committee members are working toward a July 23 markup of a comprehensive Medicare reform measure (CongressDaily, 7/12).
During the White House ceremony, Bush also described his "principles" for overall Medicare reform, including transforming fee-for-service Medicare into a system similar to private insurance, the Washington Post reports. One of the "most technical but profound" principles would change the "basic structure" under which hospital stays have been funded separately from outpatient care. In the current system, beneficiaries who have been hospitalized pay an annual $800 deductible, and those using other services pay a $100 deductible. Bush has proposed that beneficiaries pay one deductible -- "perhaps" $400 -- regardless of what kind of care they receive (Goldstein, Washington Post, 7/13). Bush also proposed that the federal government pay a fixed amount of money per beneficiary -- a "radical change," the New York Times reports (New York Times, 7/13). Among Bush's other "goals" are improving preventive care coverage, allowing current beneficiaries to keep their traditional coverage, improving Medicare's administrative functions, streamlining Medicare regulations and reducing fraud and abuse. The proposals are "intention[ally]" broad, rather than "concrete proposals," because the Bush administration intends to draft a more specific, bipartisan reform plan, the Akron Beacon Journal reports (Powell, Akron Beacon Journal, 7/13). The Post notes that Bush did not mention a dollar figure for the extra benefits, nor did he say how he would keep Medicare solvent in the long term (Washington Post, 7/13). Thompson appeared on last night's "NewsHour with Jim Lehrer" and today's "Morning Edition" to explain Bush's plan. For those reports, go to http://www.pbs.org/newshour/bb/health/july-dec01/thompson_7-12.html and http://www.npr.org/programs/morning/.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.