Medicare prescription drug benefits (Published July 20, 2001)

One of the most crucial and pivotal issues to be debated by Congress will be the possible provision of a prescription drug benefit for the 40 million members of Medicare. As with most political battles, there will be powerful forces aligned on each side with much at stake. With most things in modern America, it's all about money and power. Let's look at the fundamental issues, the sides, and the players.

As one gets older, the inevitable requirement for appropriate medications in order to maintain and protect one's health occurs. During the intense examination of the healthcare system in the mid-1990s, it was estimated that our seniors spent about 21% of their discretionary income on healthcare related expenditures. As newer and more effective medications become available to treat the chronic illnesses that impair the quality and quantity of life, the commensurate increase in costs highlight in stark relief the dilemma our seniors face. The cost of the 50 most common prescribed drugs to the elderly rose by 6.1% last year, when the overall inflation rate rose by only 3.4%. During every office day, I hear from my patients how difficult it is for them to afford their medications even though every effort has been made to find less expensive alternatives that provide comparable efficacy. When retirees that do not have the advantage of a Bush trust fund or a Cheney oil company largesse at their disposal, their fixed incomes demand that choices be made. Sometimes they cut the doses of the medication down to stretch out their budget. Sometimes they don't even fill their prescriptions. Both of these strategies risk their health. Sometimes they don't have enough discretionary income to afford going out to dinner or buying that new or replacement item for themselves or their family. So much for the Golden Years.

The Democrats are pushing for a Medicare prescription drug benefit and know that that the purchasing power of the federal government will ensure the best prices for these expensive medications. The conflict here is a new federal Democratic Medicare program versus the Republican desire to shrink Medicare. Naturally, the pharmaceutical drug industry is against any prescription drug benefit that they see as an initial step in price controls. The conflict here is medication cost relief versus corporate profit and shareholder value. Bush has allocated about $153 billion in his budget for a new Medicare prescription drug benefit, but even the congressional Republicans and Tommy Thompson, the secretary of health and human services, recognize that sum is an insufficient commitment, probably by about $100 billion. Compromising this is the “fuzzy math” $1.34 trillion tax cut passed by the congress with its peculiar start and stop dates, limitations on eligibility and cost shifts. In this budget, Bush proposed an $850 billion “contingency fund” to cover the cost of boosting defense and farm aid. The trick was that half of this fund came from Medicare reserves. Like many items in Bush's tax cut package, on closer scrutiny, it is robbing Peter to pay Paul. So even after bilateral support passed the tax cut (for cosmetic and political purposes), there have been bilateral breaks from Bush-Cheney to not divert Medicare money into the contingency fund.

So when you look at the rising cost of your medications, and you are suspicious that the generic substitutions are not there for your benefit, but for the insurance company's bottom line benefit, ask your doctor where he stands. He has a conflict as well. The tax cut helps him personally. But the tax cut just shifts future funds away from monies that should be allocated to help pay for your increasingly expensive medications.

Yes, we could have done both. An appropriate tax relief plan and protection of the hard earned budget reserves for new programs. But if you followed the budget battle, the Bush-Cheney position was pure hardball. And political smoke and mirrors may turn a $1.34 trillion tax cut into a $2.1 trillion shell game. And we all know money has to come from somewhere.



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