Bush Medicare Rx Discount Plan Criticized by Dems, Others
President Bush will today unveil a plan to offer pharmacy discount cards to Medicare beneficiaries, but Democrats and others "immediately criticized" the proposal as "not going far enough" after several media outlets yesterday reported on the plan, the Washington Post reports. Under the plan, pharmacy benefits managers that negotiate discounts with drug manufacturers and pharmacies would sell cards to Medicare beneficiaries for up to $25, allowing them to purchase pharmaceuticals at about a 20% discount. The Centers for Medicare and Medicaid Services (formerly HCFA) will establish rules for companies that offer discount cards, requiring them to affiliate with large numbers of pharmacies and to offer discounts in "every major class" of medication, a senior administration official said. Medicare beneficiaries would select one card but could "switch cards frequently," allowing them to purchase a card that offers the "best prices." Medicare will launch a public information campaign about the program this fall, a White House aide said. Within two years, Medicare will publish information about the prices that companies offering discounts charge for different drugs, allowing seniors to "comparison shop" (Goldstein/Milbank, Washington Post, 7/12). The proposal would not require federal funding or congressional approval (Fireman, Newsday, 7/12). Bush will "formally unveil" the pharmacy discount plan along with eight principles for broader Medicare reform
-- including a prescription drug benefit -- during a White House ceremony today (Washington Post, 7/12).
Democrats said that the plan would only offer discounts on a limited number of medicines from a limited number of pharmacies, and said that discounts may not benefit seniors. Sen. Bob Graham (D-Fla.) said, "The average Medicare beneficiary spends $1,700 on prescription drugs. A savings of $170 a year still leaves them with staggering bills." Some Democrats "dismissed" the plan as a "gimmick," pointing out that a number of companies and organizations already offer similar programs. Senate Majority Leader Tom Daschle (D-S.D.) said, "I hope [Bush is] prepared to go a lot farther than simply providing this redundant discount" (McQueen, AP/Philadelphia Inquirer, 7/12). Democrats also warned that the plan could "delay efforts" to pass a comprehensive prescription drug benefit under Medicare. Democratic National Committee Chair Terry McAuliffe added, "The high cost of prescription drugs is the biggest health crisis facing America's seniors. George W. Bush thinks he can solve it by passing out coupons" (Hall/Welch, USA Today, 7/12).
The pharmacy discount plan also "drew a swift, skeptical response" from groups that represent pharmacists, who predicted that seniors could "end up getting discounts at their expense" (Washington Post, 7/12). The National Association of Chain Drug Stores "reportedly advised" Bush against the proposal, which the group said would place an "unfair burden" on pharmacies. According to the group, the plan would require drugstores to lower their prices, but stores would not "necessarily see" a reduction in wholesale prices (Kiefer/Hey, Christian Science Monitor, 7/12). Critics have also raised "concern that there is not much incentive for companies to offer these plans," which "won't be subsidized by Medicare," NPR's "Morning Edition" reports (Rovner, NPR, "Morning Edition," 7/12). John Rother, a lobbyist for AARP, a group that represents seniors, said, "This is not insurance. This will help people save a little, but it cannot provide true financial protection from very high costs" (AP/Philadelphia Inquirer, 7/12). Robert Reischauer, head of the Urban Institute, added, "It's a small step in the right direction, but it's not a substitute for the real thing" -- a prescription drug benefit under Medicare (Christian Science Monitor, 7/12).
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On Capitol Hill, many Republicans "were quick to support" the pharmacy discount proposal. "It sounds like a really good idea to me. My mother would be one of those who would be very glad to have the benefit," Senate Minority Leader Trent Lott (R-Miss.) said (Charles, Reuters/Contra Costa Times, 7/12). Sen. Charles Grassley (R-Iowa) added that the plan would serve as an "interim step for relief" while Congress debates a prescription drug benefit under Medicare. "The president is going to fill that gap very effectively by this new program," he said (Norman, Des Moines Register, 7/12).