Half a Loaf on Medicare Rx Benefit
Published on Wednesday, June 18, 2003 by the Boston Globe
Half a Loaf on Medicare Rx Benefit
by Robert Kuttner

IS THE PROPOSED Medicare drug benefit, now before the Senate, worth having?

It covers only about one-fourth of seniors' drug expenses. But is it a first step toward a comprehensive benefit, as Democrats hope and Republicans fear? Or is it the first step to privatized Medicare, as Republicans hope and Democrats fear?

There's also the political question of who gains in 2004. If the bill passes, President Bush can usurp a popular Democratic issue and boast: ''I delivered a drug benefit under Medicare.''

But his Democratic challenger can say: ''Bush's Medicare drug benefit doesn't even take effect until 2006. It's a sweetheart deal for HMOs. It has more holes than benefits. The only reason you get anything is that Democrats fought for it and Republicans were forced to go along. Vote for us and we will get you the rest.''

Here's what the bipartisan Senate bill, approved last Thursday, 16-5, by the Finance Committee, actually does:

Beginning in 2006, seniors could pay an additional $35 a month for partial drug coverage. In most states, the drug benefit would be sponsored by private insurers, and there would be no price controls on drugs.

Why not just have Medicare run it? Because private administration of the drug benefit was a key Republican demand (but Democrats got their demand that seniors can get the drug benefit without having to quit Medicare and join an HMO for the rest of their health care).

Seniors would pay the first $276 a year in drug costs. Then the program would pay half of all costs up to $4,500 a year. The individual would pay everything between $4,500 and $5,800, and the plan would pay 90 percent of all costs above that. This complex formula is just nuts, but it is the best Republicans offered.

An elderly person with $4,000 in drug bills would pay a total of $2,558 out of pocket in premiums, deductibles, and co-payments. Many would hesitate to enroll. The formula is intended to hold down costs - another Republican demand (what with all those tax giveaways to finance). Even so, the program would cost the government $40 billion a year.

Last week, Senator Edward M. Kennedy persuaded most of his Democratic colleagues that this minimal program was still worth voting for. Kennedy argues that the bill positions the Democrats to outperform Bush on the issue in 2004. Monday, in a Senate speech, he chided Republicans for the meager benefits, pledged to fight for more, and urged Democrats to support the bill as a ''down payment.''

The Wall Street Journal editorial page, temple of conservative ideology, seems to share Kennedy's views. In a blistering editorial Monday titled, ''Medicare drug folly,'' the Journal warned that Republicans who support the bill ''are fooling themselves.... Republicans can never win an entitlement bidding war. They will spend the rest of their public lives sounding like Scrooge for not raising benefits or raising taxes on their own voters to pay for subsidies.''

It sounds as if Kennedy and the Journal are right: Liberals goaded conservatives into supporting a new entitlement for seniors, and Democrats can still out-flank Bush on the issue next year. But Congress has two houses. The more militantly conservative House of Representatives hopes to add provisions that Democrats consider deal-breakers - an even stingier benefit package and a phasing out of Medicare as a universal and public program.

If the House passes such a bill and the Senate Republican leadership goes along, most Senate Democrats would filibuster. Many liberal groups, including Consumers Union, US Action, and the AFL-CIO, oppose even the Senate bill with its move toward limited privatization and away from universal coverage.

Presidential candidates John Kerry and Bob Graham voted against the bill in committee. Why, they argue, should Democrats give Bush another political victory on a program that is largely sham?

Yet Bush's shams are starting to catch up with him. And this issue, increasingly, is pay dirt for Democrats, win or lose. As long as the final bill doesn't lead to the fragmentation of Medicare, Democrats can expose its limitations, vote for it, and pledge to improve it.

Two sensible improvements: All Medicare recipients should get the same prescription drug benefits as members of Congress. And Congress should repeal the latest Bush tax cut and use the proceeds to provide comprehensive drug coverage under Medicare with no gimmicks.

Most Americans want high-quality health coverage more than tax cuts. It is conservative dominance of the agenda that is preventing us from getting it. The more that reality is exposed, the better.

Robert Kuttner's is co-editor of The American Prospect. His column appears regularly in the Globe.

Copyright 2003 Globe Newspaper Company.