Rx DRUG BENEFIT: Future of Medicare Shrouded in Doubt
While the House recently approved a Republican bill that would provide Medicare patients with a prescription drug benefit, the plan "stands little chance of becoming law this year," and critics doubt its financial feasibility, the Washington Post reports. The bill relies on private companies to provide a drug benefit for seniors with the help of government subsidies. According to Health Insurance Association of America President Chip Kahn, however, insurance firms "didn't see a way that [the GOP] insurance plan would be financially feasible," raising doubts among experts about the proposal's efficacy. "Given that the insurance companies are not thrilled with this proposal, it would lead me to believe it is not feasible," Judith Lave, a health economics professor at the University of Pittsburgh, said. While President Clinton has vowed to veto the bill, the Republicans may have the chance to prevail next year if they can capture the White House and retain control of Congress in November.
Meanwhile, the Clinton administration and many Democrats support a plan that would add a drug benefit to Medicare using pharmacy benefit managers to negotiate with private companies and manage plans in different regions. Health experts, however, have doubts that PBMs will have the same success under a public mandate that they have in the private sector. "In the private sector, these plans have gotten very imaginative and creative in encouraging patients to use certain drugs and strategies," Gail Wilensky, former head of HCFA, explained, adding, "Whether or not that would be allowed in a public program isn't clear. It's also unclear how seniors would respond to that kind of directed behavior." In addition, both parties' plans face another hurdle: If the government adopts a drug plan, companies that currently provide a drug benefit to former employees may drop coverage, shifting a heavy burden from private industry to the federal government (Kessler, 7/7).