What’s the Difference?
The fundamental difference between the two approaches is that the Democrats would expand the Medicare entitlement to include their plan inside the Medicare system, while Republicans would create a standalone insurance plan that would be offered and funded by insurance companies willing to provide it.
Beyond this fundamental difference, the two plans are strikingly similar:
They both contemplate the beneficiary paying a premium — albeit with the Democrats offering lower premiums.
Both plans have a maximum payout of about $1,000 in the first year.
Both plans pay 50 percent of the cost of drugs.
Both plans would give seniors access to drug discounts.
Both plans would provide premium assistance for employers offering retiree pharmacy plans.
Both plans would provide for a catastrophic benefit paying the full cost of drugs above an annual threshold — $6,000 in the case of Republicans and undetermined but likely similar in the case of Democrats.
Both plans would provide premium support for low-income beneficiaries at about the same point below the poverty level.
Both plans would provide premium assistance for employers offering retiree pharmacy plans.
Republicans point out that their program would increase its first-year limits at the rate of prescription drug inflation, while the Clinton/Gore plan would let its limits grow at the same rate the consumer price index rises. They also point out that drug costs are currently rising at more than 15 percent per year — far above the roughly 3 percent growth in the consumer price index.
The Democrats project that their plan will cost $38 billion over five years (in addition to another $35 billion for a catastrophic plan), while the Republicans project that their plan will cost $40 billion over the same period (including the cost of a catastrophic plan).
Both Sides Want to Take Credit
The importance of a Medicare pharmacy bill to the election was underscored by the efforts both sides made in June to grab the momentum on the issue:
Republicans rushed to mark-up their bill in the House Ways and Means Committee late in June by a party-line vote of 23 to 14 and are now looking to pass it in the House before the August recess.
In a surprise move, Democrats countered by trying to add a pharmacy bill of their own, slightly more generous than the Clinton/Gore plan, to an appropriations bill in the Senate. They lost on a largely party-line vote of 53-44.
There is little chance that a Medicare prescription drug bill will become law in 2000 for the same reasons we are not likely to see a patients’ bill of rights become law — this is more about political posturing in an election year than it is about new policy.
The Medicare drug issue — while a huge election issue — has not been vetted in Washington. That is, there has been little effort to build any kind of political consensus between House and Senate Republicans, between Democrats and Republicans, and between the Congress and the White House. With just a couple of months left for this Congress, there is simply too little time and too far to go to make this happen.
Bickering and Name-Calling
The desire to make this a political issue rather than a policy success was underscored in June by the reaction to the Republican plan by leading Democrats — despite the substantial similarities between both plans:
President Bill Clinton — Clinton drew a line in the sand demanding that any compromise would have to at least “give all seniors the ability to choose an affordable, defined, fee-for-service drug benefit under Medicare, even if it’s just one of several options. ?” “Anything less would be an empty promise.” Essentially, Clinton has signaled he would veto any program that did not offer a new entitlement under Medicare, as opposed to the private insurance programs the Republicans are offering.
House Minority Leader Richard Gephardt (D-Mo.) — A “crazy quilt” and “totally deficient.” He said the Republicans were “reluctantly forced” to offer something out of political necessity.
Rep. Pete Stark (D-Calif.) — “This plan heaps money on the lobbyists’ clients, hoping they might write an insurance policy that might provide some Medicare members with a pharmaceutical bill.”
Rep. Frank Pallone (D-N.J.), who has offered his own bill — The Republican proposal is “just political cover and empty promises” and “has no chance of going anywhere.”
Rep. Anna Eshoo (D-Calif.), who is also co-sponsoring a Democratic response — Focusing on the Republican use of the insurance industry, and the many HMOs that have dropped Medicare plans, Eshoo said, “I don’t believe insurance companies hold a great deal of credibility with seniors.”
This is not the kind of rhetoric that will result in a compromise on a major piece of legislation like Medicare prescription drugs with barely eight weeks left in the life of this Congress.
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