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Congressional Testimony
March 22, 2001, Thursday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 8480 words
COMMITTEE:
SENATE HEALTH, EDUCATION, LABOR & PENSIONS
HEADLINE: TESTIMONY ACCESS TO HEALTH CARE SERVICES
TESTIMONY-BY: PATRICIA NEUMAN, SC.D , VICE PRESIDENT
AND DIRECTOR,
AFFILIATION: MEDICARE POLICY PROJECT
BODY: March 22, 2001 Improving Prescription Drug
Coverage: Opportunities and Challenges for Reform Patricia Neuman, Sc.D. Vice
President and Director, Medicare Policy Project The Henry J. Kaiser Family
Foundation For Hearing on Prescription Drugs and Medicare Financing Committee on
Finance The United States Senate Thank you, Mr. Chairman and Members of the
Committee, for the opportunity to testify on efforts to improve prescription
drug coverage for Medicare beneficiaries. I am Patricia Neuman, a vice president
of the Kaiser Family Foundation and Director of the Foundation's Medicare Policy
Project. I am also an associate faculty member in the Department of Health
Policy and Management at The Johns Hopkins University School of Hygiene and
Public Health. By many measures, Medicare has been and continues to be one of
the nation's most successful federal programs. Medicare has provided a vital
source of health coverage for elderly and disabled Americans, a population that
faced significant difficulties obtaining health insurance before Medicare was
created. Since its enactment in 1965, Medicare has been reformed incrementally
over time to address many critical problems as they have emerged. Due to changes
in Medicare payment systems, for example, Medicare has been at least as
effective as the private sector in controlling the rise in health care spending
over time. Perhaps most importantly, Medicare's successes can be measured by the
broad popular support it enjoys among both the general public and the high level
of satisfaction reported by its beneficiaries. Of course, Medicare continues to
face challenges that will need to be addressed through ongoing reforms. Over the
long term, the greatest challenge will be to finance care for an aging
population that will double in size over the next 30 years. This will require an
infusion of revenues in addition to the new funds that would be needed to pay
for the addition of a new drug benefit. Improvements are also needed to
stabilize the Medicare+Choice program, to help Medicare become a more fair and
reliable business partner for health providers and plans, and to ensure the
program evolves with advances in medical practice. From the beneficiary
perspective, however, no problem is more pressing than filling one of the
primary gaps in Medicare's benefit package with affordable prescription drug
coverage. Today, in the presence of a federal budget surplus, a bipartisan
commitment to addressing this problem, and public support for a
Medicare
prescription drug benefit, this appears to be an historic window of
opportunity to take on this policy challenge. My testimony today begins with a
brief review of existing sources of prescription drug coverage and a discussion
of why coverage matters. It then reviews efforts to improve coverage,
identifying both significant areas of common ground and key policy issues and
challenges, and their budgetary implications. Who Lacks Prescription Drug
Coverage? According to data released just last week, more than 1 0 million
beneficiaries- accounting for more than a quarter of the Medicare
population-lacked prescription drug coverage throughout 1998, the most recent
year for which data are available. This number masks the much larger share of
beneficiaries-about one-half-who were without continuous coverage at some point
over the course of that year. Lack of coverage disproportionately impacts those
who are low-income, living in a rural area, and among the oldest-old (ages 85
and older). The absence of drug' coverage affects beneficiaries of all income
levels. Half of all beneficiaries without drug coverage have an income above 175
percent of the federal poverty level (above $14,600 for an individual in 2000)
(Exhibit 1). Still, it is the near- poor (those between 100-175 percent of the
poverty level) who are the most likely to be without drug coverage because their
incomes and assets tend to exceed the levels necessary to qualify for Medicaid,
but still leave them unable to purchase a Medigap policy with drug coverage
easily on their own (Exhibit 2). More than 30 percent of beneficiaries with
incomes between 1 00 and 175 percent of poverty lacked drug coverage in 1998,
compared with 23 percent of those with incomes above 300 percent of poverty, and
27 percent of those with incomes below poverty. Beneficiaries living in rural
areas are more likely than those living in other areas to lack drug coverage.
Nearly four in ten beneficiaries living in rural areas (37 percent) lack drug
coverage, compared to 23 percent of those in metropolitan areas (Exhibit 3).
These beneficiaries are both less likely to have been in jobs that offer retiree
health benefits and to have access to a Medicare managed-care plan. Only 14
percent of rural beneficiaries have a Medicare+Choice plan in their region,
explained in part by the difficulties of establishing plans in these areas.
Medicare's oldest-old are significantly more likely than younger beneficiaries
to go without drug coverage-despite the need for multiple medications that often
comes with advancing age and multiple chronic conditions. More than a third of
those ages 85 and older (34 percent) were without coverage in 1998 compared to
25 percent of those between ages 65 and 74. This lack of drug coverage comes at
a time when seniors' retirement savings are often insufficient to help them
afford expensive medications. What Is the Current State of Prescription Drug
Coverage? While an estimated 73 percent of beneficiaries had some form of drug
coverage for at least part of the year in 1998, such coverage is often
inadequate and, for many, likely to decline in the near future. Beneficiaries
today rely upon a range of sources for help with the cost of their medications,
including employer- sponsored retiree coverage, individually purchased Medigap
policies, Medicare managed-care plans, the Medicaid program, and- in some
states-state-operated pharmacy assistance programs. Although these sources have
helped to fill Medicare's gaps and shield seniors from high out-of-pocket costs,
access to such coverage is increasingly limited and expensive.
Employer-sponsored plans, the leading source of drug coverage for seniors,
provided relatively comprehensive drug benefits to nearly 33 percent of the
Medicare population in 1998. There is some concern, however, that reductions in
drug benefits for retirees are on the horizon. Forty percent of large employers
say they are seriously considering cutting back on drug benefits for their
retirees in the next three to five years, according to a recent survey of large
employers conducted for the Kaiser Family Foundation by Hewitt Associates
(Exhibit 4). Further, with the share of large employers offering health benefits
to retirees over age 65 declining from 80 percent in 1991 to 66 percent in 1999,
today's workers are less likely than current retirees to receive drug benefits
from their employers when they retire. Individually purchased Medigap policies
have been another source of prescription drug coverage for the Medicare
population. The premiums for these policies, however, are rising rapidly -- by
as much as 20 to 30 percent in many markets - - and now range from about $1,400
to $4,700 per year, depending on where beneficiaries live, the type of coverage
they obtain, and their age. As a result, only 9 percent of all beneficiaries
with a standard Medigap policy-accounting for less than 2 percent of the entire
Medicare population-have a standard Medigap plan that includes drug coverage
(Exhibit 5). Access to Medigap drug coverage is further restricted by rules
permitting insurers to deny Medigap drug coverage to many under-65 disabled
Medicare beneficiaries and to others who lose coverage upon disenrolling from an
HMO. Medicare HMOs were, until recently, a promising source of prescription drug
coverage, assisting 15 percent of all beneficiaries with their drug costs in
1998. There is much uncertainty, however, about the future role of
Medicare+Choice plans as a source of prescription drug coverage. In recent
years, the number of plans participating in the Medicare+Choice program has
declined, as have both the number of plans offering drug benefits and the level
of drug coverage offered. (Exhibit 6). As a result, 22 percent of Medicare HMO
enrollees had no drug coverage in 2000 and another 25 percent had a drug benefit
of $750 per year or less (Exhibit 7). For those with low incomes, 'Medicaid is a
critical source of drug coverage, most notably those receiving cash assistance
through the Supplemental Security Income (SSI) program and those living in
nursing homes. Although states are not required to provide drug coverage under
Medicaid, all include it as part of their Medicaid benefits package. More than 5
million (12 percent) community-based Medicare beneficiaries were enrolled in
Medicaid in 1998, most of whom (89 percent) received prescription drug coverage
from this source. It is important to note, however, that only about half of all
beneficiaries living below the poverty level received any assistance from
Medicaid (Exhibit 8). Many states are now struggling with the budgetary impact
of prescription drug costs. Medicaid payments for outpatient pharmaceuticals
rose from an estimated $5 billion in 1990 to $17 billion in 1999, at an average
annual increase of almost 15 percent. This growth stemmed largely from rising
costs for the disabled and elderly, who accounted for 80 percent of all Medicaid
prescription drug spending in 1998 (Exhibit 9). States already have some ability
to limit the costs of their Medicaid drug benefits through the drug rebate
program, which uses the government's volume purchasing authority to obtain
discounted prices. States are also adopting additional strategies to control the
rapid growth in pharmacy spending, by limiting the number of prescriptions
covered per month, seeking larger discounts from manufacturers, restricting
access to expensive brand-name drugs, and proposing that local pharmacies lower
their prices. In sum, states are looking to restrain-rather than expand-their
Medicaid coverage of prescription drugs. Finally, some states (26 as of January
2001) have enacted state- based pharmacy assistance programs to assist seniors
on fixed incomes. Combined, these programs assist an estimated one million
individuals, the majority of whom are concentrated in three states. As with
Medicaid, these programs vary widely in terms of structure, eligibility, and
benefits. While most provide a direct subsidy to low-income seniors, other
approaches include discount programs, tax credits, and private-insurance models.
Most are relatively new and not widely utilized. In sum, while a patchwork of
alternative sources of prescription drug coverage may compensate, in part, for
the absence of a
Medicare prescription drug benefit, both the
generosity and the reliability of each of these sources are increasingly
questionable in today's environment Given these trends, the is concern re that
the number of those without drug coverage will rise, along with the number of
those who are underinsured for the costs of their prescription medications. Why
Is Drug Coverage Important? Prescription drug coverage matters to people of all
ages, but it is especially important to the sick and chronically ill who are
disproportionately represented among the elderly and disabled on Medicare.
Seniors are more likely than younger adults to have multiple acute and chronic
conditions typically treated with medications, which explains why drug use
increases dramatically with age. Those ages 65 to 74, for example, fill on
average 20 prescriptions per year, compared with an average of 5 prescriptions
filled by those between the ages of 1 9 and 44 (Exhibit 1 0). The need for
prescription drugs often comes at a substantial cost to the Medicare population
- a population that generally lives on fixed incomes. Forty percent of all
Medicare beneficiaries - 14 million people - have incomes below 200 percent of
poverty, or below $16,500 for an individual (Exhibit 1 1). Given the key role of
pharmaceuticals in medical care today, those without drug coverage are basically
uninsured for what may arguably be the most critical component of their medical
treatment. In addition, there is a growing body of research documenting the
widening gap between the haves and the have-nots. Beneficiaries without drug
coverage filled 8 fewer prescriptions per year on average than those with
coverage in 1998. Even more striking, beneficiaries in poor health without drug
coverage averaged 15 fewer medications than their insured counterparts (Exhibit
12). There is also anecdotal evidence of beneficiaries misusing drugs because
they cannot afford to take their medications as prescribed by their doctor, by
skipping doses, splitting pills, and sharing medicines with friends or family
members. Systematic underutilization of prescribed medications poses a threat to
quality of care and -potentially increases costs to the system in terms of
avoidable emergency- room and hospital admissions, physician visits, and nursing
home stays. Beneficiaries without drug coverage also incurred higher out-of-
pocket costs in 1-998, spending on average $221 more than beneficiaries with
drug coverage ($546 vs. $325). Among those in poor health, the disparities in
out-of-pocket spending widened between those who lacked coverage and those with
coverage ($820 vs. $490) (Exhibit 13). Beneficiaries without drug coverage incur
relatively high costs both because they do not have an insurer to share the cost
of each prescription and because they often pay the full retail price when they
go to the pharmacy. By contrast, those with prescription drug coverage are often
shielded from the full effect of high and rising drug costs as they may benefit
from pharmacy discounts negotiated by their employer-sponsored plan or HMO. The
predicted rise in drug expenditures will likely compound these concerns. Since
1990, national drug spending has almost tripled from $40 billion to an estimated
$117 billion in 2000 and will, according to both the Congressional Budget Office
and the Health Care Financing Administration, rise at an even more rapid rate in
the next decade. In addition, spending on prescription drugs has grown more
rapidly other services, including physician, hospital, and nursing home care
(Exhibit 14). If, as expected, employers, Medicare+Choice plans, and states look
to limit their financial liability for drug spending, the financial burden will
likely be shifted directly to Medicare's elderly and disabled, who could face
dramatic increases in drug costs. Efforts and Opportunities for Expanding
Prescription Drug Coverage There are now three general approaches at the
forefront of the national policy debate on improving prescription drug coverage
for all Medicare beneficiaries. Drawing on models introduced during the last
Congress, these include: an integrated Medicare drug benefit that would be
administered by private entities, such as pharmacy benefit managers; a Medicare
drug benefit that would be offered along with other benefits through high-option
plans, as part of a broader framework for reform; and a stand-alone Medicare
drug benefit that would be-offered by private plans. In addition to these
efforts to provide a universal
Medicare prescription drug
benefit, the President has proposed the Immediate Helping Hand program that
would assist beneficiaries with low incomes (below 175 percent of poverty) and
those of all income levels with high out-of-pocket prescription drug expenses
(above $6,000) through a new block grant to the states. This is proposed as an
interim measure -- in anticipation of enacting universal access to drug coverage
as part of more comprehensive Medicare reforms. Viewed together, these plans
reflect a range of philosophical perspectives and policy priorities and
illustrate difficult tradeoffs that policymakers face in designing a
Medicare prescription drug benefit. A review of these proposals
also reveals significant areas of apparent agreement among them. Key
Similarities Recognizing the Need to Help Beneficiaries Who Lack Meaningful Drug
Coverage. For the first time in many years, there now appears to be a growing
consensus on the need to help all beneficiaries with prescription drug expenses,
rather than targeting benefits to those with low incomes or catastrophic
expenses. There are, of course, important differences among proposals that would
have a significant impact on both the number of people who would get drug
coverage and the level of that coverage, but the rhetoric of the debate appears
to be converging on the need for a universal approach. Protecting Low-Income
Beneficiaries. Virtually every major proposal recognizes the need to provide
additional protections for low-income beneficiaries. Many would provide full
premium assistance to the lowest-income beneficiaries (with incomes below 135
percent of poverty) and partial premium assistance to those with incomes up to
150 percent of poverty, with some offering assistance to those with incomes up
to 175 percent of poverty. In addition to premium assistance, many of the
leading proposals would assist low-income beneficiaries with cost-sharing
requirements. Most plans would rely Upon states to administer additional
benefits to the low- income population, and many would require states to use
asset tests to determine eligibility for benefits (at less than twice the limit
permitted for SSI). Based on the experience of the Qualified Medicare
Beneficiary Program, this approach could pose significant barriers for
individuals applying for the program., potentially resulting in lower
participation rates. Providing Protection Against Catastrophic Drug Expenses.
Several leading proposals would aim to assist beneficiaries with catastrophic
prescription drug expenses. Catastrophic protection, sometimes referred to as
"stop-loss," helps protect the relatively small share of beneficiaries with
high-end drug expenditures. While proposals differ in terms of the threshold
amount above which expenses would be covered (i.e., $4,000 vs. $6,000) and how
that amount would grow over time, there appears to be recognition of the special
needs of those with extraordinarily high drug expenses. Establishing a Voluntary
Benefit. Virtually all of the current proposals would allow beneficiaries to
take advantage of the new prescription drug benefit on a voluntary basis. Those
satisfied with their existing coverage (from a former employer, for example)
would not be required to enroll in the new program, nor would they be forced to
pay for a benefit, unless they elected to receive it. The decision to make the
benefit voluntary reflects one of the chief lessons learned from the ill-fated
Medicare Catastrophic Coverage Act (MCCA) of 1988. Distancing Government from
Direct Drug Pricing Marking another major departure from the MCCA, none of the
current proposals for improving coverage advocates the use of a
government-administered pricing system. Instead, they tend to delegate
cost-management decisions to risk-bearing private plans or to other private
entities such as pharmacy benefit managers (PBIVIs). Maintaining a Role for
Employers. Acknowledging the key role that employers play in financing
prescription drug coverage for retirees and the trend toward eroding
employer-sponsored drug coverage, many proposals would offer financial
incentives to encourage some level of continued employer-based drug coverage.
Policy Challenges Despite the many important areas of agreement, there remain a
number of difficult decisions and policy challenges that have implications for
both beneficiaries and program costs. What strategies should be used to reach
beneficiaries without drug coverage? One of the major challenges is designing a
program that will reach the largest number of beneficiaries who lack drug
coverage, including those who live in rural areas, those who have modest and low
incomes, and those who are frail or among the oldest-old. This means developing
an approach that can adapt to highly variable local markets and health delivery
systems, that is available everywhere, that is affordable, and that is
relatively user-friendly given the vulnerabilities in this population. Making
coverage available. One of the key issues is ensuring that Medicare drug
benefits are available to those who live in all parts of the country. Despite
differences pertaining to the desirable size of traditional Medicare and the
role of competitive private plans, one of the major policy challenges is finding
a way to deliver drug benefits to those in the traditional fee-for-service
program, recognizing both the sheer number of beneficiaries covered under the
traditional program today (86% of all beneficiaries) and the challenge of
delivering benefits through private plans in difficult-to-serve areas. The
recent withdrawal of many Medicare HMOs, which disproportionately affected
non-urban areas, underscores the need to provide a reliable, stable source of
drug coverage - that can withstand the swings of private plans' participation
decisions and that will work for beneficiaries no matter where they live, or
what plans are offered in their area. Some proposals would make the prescription
drug benefit available through both traditional Medicare (administered by
private plans) and Medicare+Choice plans. As with other benefits covered by
Medicare today, this approach guarantees benefits, whether the beneficiary lives
in Miami or Manchester. Others would rely on subsidized private plans to offer
drug benefits, and give the Secretary authority to assure that there is a fall
back for beneficiaries in areas where private plans are not available. The
latter strategy provides less clarity about how drug benefits will be provided
to beneficiaries living in areas where private plans are less likely to be
present, or where plan turnover is a problem. Making coverage affordable. A
second key decision that will affect participation is the level of premium
subsidies. Decisions -about premium subsidy levels will have a direct impact on
both the number of beneficiaries expected to gain drug coverage and program
spending. The willingness of beneficiaries to pay a premium (and participate in
the new drug program) will be directly related to their perception of the value
of the benefit. Previous CBO estimates indicate that, all things being equal,
higher subsidy levels are likely to result in more beneficiaries getting drug
coverage. There appears to be agreement across proposals to provide general
premium subsidies, although the level of the subsidy ranges from 25 to 55
percent of the drug costs covered under the plans. Premium subsidies are also
necessary in a voluntary program to avoid selection problems, given concerns
that beneficiaries with low drug costs will not sign up if premiums are too
high, while those with predictably high drug costs will be more likely to do so,
ultimately resulting in higher costs for all. Subsidies are viewed as a means of
encouraging those with relatively low drug costs to enroll, guarding against
such problems. Making coverage user-friendly. A third critical factor in helping
the largest number of people is making the program "user- friendly" and easy to
navigate to accommodate the growing share of beneficiaries who will be among the
oldest-old, those with diseases such as Alzheimer's, and others with frailties
and disabilities. Medicare is popular among beneficiaries today, in part because
obtaining coverage requires relatively few transactions. Seniors are
automatically covered when they turn 65 if they are on Social Security. Payments
are automatically deducted from Social Security checks, so seniors don't have to
remember to write a check each month. The easier it is for beneficiaries to sign
up for prescription drug coverage, pay their monthly premiums, and stay covered,
the more likely they are to do so. How should benefits be structured? The design
of the Medicare benefit will also influence the extent to which the plan shields
beneficiaries from rising drug costs, the level of program spending that will-be
required, and the rate at which spending will grow over time. One of the key
decisions is whether prescription drugs should be offered as a defined, uniform
benefit or as a benefit valued at a specific dollar amount. The rationale for
using an actuarially defined value is that it gives plans maximum flexibility to
adapt benefit packages to changing drug technologies and changes in health-care
delivery more broadly. It can also be a strategy for explicitly limiting the
government's financial liability for drug expenses. The chief downside, however,
is the potential for selection problems resulting from plans modifying benefit
packages to attract healthier and lower- cost enrollees. There is also concern
that a specified dollar approach, if not indexed to grow with the rise in drug
spending, would diminish the value of the benefit and shift costs to
beneficiaries over time. A further issue, and one that would make the new drug
benefit different from all others that are covered by Medicare, is that drug
benefits could vary across plans, and across markets, potentially creating
fairness concerns and confusion for beneficiaries. Among proposals that specify
a uniform benefit, there are many important decisions regarding deductibles,
cost-sharing and benefit levels, and catastrophic protections. -Deductibles:
Most would impose an annual deductible for drug benefits $250). -Benefit levels
and cost-sharing: Many would impose 50% co- insurance on drug expenditures up to
a specified amount (@$2,100). A modification of this approach would reduce the
level of co-insurance from 50% to 25% as the beneficiary's level of drug
expenditures increases. -The "Hole in the Donut": Many proposals would cover
expenses up to a specified amount, but leave a gap in coverage between the
benefit limit and the level of drug expenditures required to qualify for
catastrophic protection. -Catastrophic protection: Virtually all plans would
assist beneficiaries with extraordinary drug costs, but they differ in both the
level above which such coverage would begin (i.e., $4,000 vs. $6,000) and the
means by which this amount would be indexed over time. Each of these decisions
could have significant implications for the number of people who are helped by
the new program, the extent to which the new program shields beneficiaries from
high out-of-pocket spending for prescription drugs, and for program spending.
What are the key strategies for controlling costs? Given the projected rise in
drug expenditures, all of the major proposals face difficult decisions about how
to control Medicare spending for this new coverage without compromising the
capacity for research and development. In the past five years alone, average per
capita prescription drug expenditures for Medicare beneficiaries have basically
doubled. According to the latest CBO numbers, drug spending will rise at an even
more rapid rate over the next decade, due to increases in drug prices, increases
in utilization, and the introduction of new, higher priced drugs. Most
Medicare prescription drug proposals would rely on the private
sector to help control spending. Some would give risk- bearing private plans
(such as HMOs) responsibility for managing the new drug benefit. Others would
have Medicare contract with private entities, such- as pharmacy benefit managers
(PBMs), to manage the drug benefit, following the practice of employers and many
health plans in the private sector today. PBMs use a variety of strategies to
influence drug use and spending. Typically, they negotiate discounts with
pharmaceutical manufacturers, pharmacies, and mail- order firms; establish
formularies; develop utilization review procedures; and work with their clients
to develop cost-sharing structures that encourage generic substitution and the
use of lower-cost brand name drugs. The capacity of PBMs and other private
entities to influence Medicare drug spending, however, will be directly related
to how much authority they are given to use the tools that appear to be working
in the private sector. For example, some proposals would give beneficiaries
access to non-formulary drugs, provided their physician certifies the drug is
medically necessary. Others would make it more difficult for beneficiaries to
access non-formulary drugs without going through an appeals process. The
Medicare drug proposals now under consideration differ in the extent to which
they would permit PBMs and other plans to use these types of tools, and these
decisions could have a significant impact on access and savings. Who should be
at risk for the cost of a new drug benefit? Related to the issue of
cost-containment is the extent to which proposals rely on risk-bearing plans,
rather than non-risk bearing entities such as PBMs, to manage drug benefits and
control costs. The strategy of having private plans assume full risk for a drug
benefit would limit the federal government's liability for drug expenditures and
distance the government from decisions involving price. However, as noted by the
insurance industry in testimony last year, insurers may be reluctant to assume
the full risk of a new drug benefit, posing uncertainties in terms of access for
beneficiaries in the absence of a clearly defined fall- back plan. To address
this concern, some would have the federal government assume partial risk,
through reinsurance, in the form of subsidies to private plans with high cost
enrollees. An alternative approach would have the government assume full risk,
paying private entities, such as PBMs, a fee for managing benefits and costs.
This approach follows the lead of the private sector in controlling drug costs,
by relying on entities that already have an infrastructure in place for managing
a drug benefit. A modification of this approach would have PBMs assume partial
risk, providing a stronger incentive for such entities to achieve savings. How
should the new benefit be administered? As prescription drug benefits are often
discussed within the context of broader Medicare reforms, proposals for
improving coverage offer a range of strategies for administering this particular
benefit. Some plans advocate preserving HCFA's existing administrative
authority, while others propose the creation of an independent entity
responsible for the administration and oversight of M+C plans and private plans
offering the drug benefit or-more broadly- of all plans, including the
traditional Medicare program. Under the latter approach, an independent agency
could govern everything from competition among both traditional and private
plans to beneficiary enrollment, education, and outreach. There are a number of
questions to consider regarding the administration new drug program, some of
which depend on the extent of other reforms under consideration. For example,
what operational changes are needed to make the-program as use - friendly as
possible for beneficiaries? Would a new agency eliminate concerns about HCFA's
ability to be a fair and impartial manager of both fee-for-service and managed
Medicare, or add inefficiency, bureaucracy, and confusion for beneficiaries? Are
there functions that should be out-sourced or delegated? For example, would '.t
make sense to have an independent outside entity advise the Secretary on the
-classes of drugs that should be covered by all plans, as is suggested under one
of the leading proposals? Conclusion Today's 40 million Medicare beneficiaries
are disproportionately likely to suffer an array of chronic health conditions
now treatable with prescription medications. The range of proposals currently
under consideration for improving prescription drug coverage is a promising sign
that the needs of this population could soon be addressed. While there are
differences among these proposals, they also reflect a significant amount of
common ground. These policy issues are set within the broader context of the
debate over whether a prescription drug benefit should be enacted before
consensus is achieved on more comprehensive reforms, and the debate over how
much money should be dedicated to a new drug benefit versus other national
priorities. Decisions regarding spending for a new drug benefit will clearly
impact both the number of people who receive help and the level of assistance
they receive. This appears to be an historic window of opportunity for
addressing the prescription drug needs of people on Medicare. There is
widespread agreement on this problem, apparent bipartisan interest in arriving
at a solution, and strong public support for action. There is also a large
federal budget surplus that would greatly facilitate the financing of what
promises to be an expensive addition to the Medicare program. The decisions made
by this Congress could significantly improve prescription drug coverage
beneficiaries.
LOAD-DATE: April 18, 2001, Wednesday