Copyright 2002 The Times-Picayune Publishing Company  
The Times-Picayune (New Orleans)
March 21, 2002 Thursday
SECTION: NATIONAL; Pg. 14

LENGTH: 780 words

HEADLINE: Congress still split on drug coverage;
Little progress likely before fall elections

BYLINE: By Bill Cahir; Newhouse News Service

BODY:
WASHINGTON -- Federal lawmakers appear no more likely to create a Medicare prescription drug benefit than they did eight years ago, when a divided Congress scuttled a health care reform bill advanced by Hillary Rodham Clinton.

President Bush last year proposed two drug coverage plans and last month sought congressional approval for yet one more. But the congressional divisions that once thwarted President Clinton and his wife now promise to stymie Bush as well, even though Bush has taken a less ambitious approach.

Policy makers cannot agree about how much to spend on drug coverage. They differ on how best to invest any new federal cash. And they don't have the support of the leading drug-makers' lobby, which opposes any new prescription benefit unless Medicare is privatized.

The Pharmaceutical Research and Manufacturers Association, the drug companies' muscle in Washington, wants to scrap the Medicare fee-for-service payment system.

In its place, it would have Congress offer a menu of private health insurance plans to seniors, much like the list of options available to members of Congress. Only through a Medicare overhaul would the drug makers back the creation of a prescription benefit.

"It would be very inefficient -- and a waste, basically -- if you brought in a prescription drug benefit on top of the current Medicare program," said Jeff Trewhitt, association spokesman.

Critics contend the drug makers' group simply does not want to be forced to negotiate price discounts with the federal government. Sen. Paul Wellstone, D-Minn., claims the Center on Medicare and Medicaid Services would do "a heck of a good job" negotiating discounts for 39 million Medicare recipients.

Observers expect Congress to accomplish little on prescription drug policy before the fall midterm elections.

"The Democrats would like the issue and the Republicans would like to insulate themselves from any political fallout without moving forward with an ambitious and expensive program," said Thomas Mann, senior fellow at the Brookings Institution. "That suggests to me that Democrats will try to hold out for something substantial, and Republicans will move toward them. But not far enough to resolve it."

Fiscal estimates fluctuate wildly.

Bush last month proposed to allocate $190 billion in 10 years for new prescription drug coverage. The GOP-controlled House Budget Committee put aside $350 billion. Senate Democrats sought $500 billion. All of those projections are likely to prove inadequate, according to the nonpartisan Congressional Budget Office.

The CBO estimates that Medicare recipients will spend $1.8 trillion on prescription drugs in the next 10 years. Any federal program that would pick up much of that expense would be very costly, the office warned.

Those who want to launch a universal Medicare drug benefit for all eligible seniors consider the financial outlook bleak. Bush's tax cut, slated to deprive the U.S. Treasury of $1.35 trillion or more, has eliminated the cash needed to finance a prescription drug entitlement, those health experts say.

"Clearly, there's not enough money after the tax cut of last spring and other expenditures," said Ron Pollack, executive director of Families USA, a nonprofit group.

Bush in February asked Congress to have state Medicaid programs offer drug coverage to seniors whose incomes fall below 150 percent of the poverty level. But he proposed to devote the bulk of the new cash he would spend, $116 billion out of $190 billion overall, to changes in the Medicare system.

Through Medicare reform, the Bush administration claims that it would finance coverage of medicines for seniors, increase the emphasis on preventive health care services and protect people from catastrophic health costs.

Centrist lawmakers led by Sens. John Breaux, D-La., and Bill Frist, R-Tenn., would have the federal government finance private drug coverage for Medicare recipients. The Breaux-Frist approach would let seniors choose among health plans offering the most affordable coverage; this is the approach favored by the drug lobby.

"Even if Congress could agree on the price tag for a prescription drug package -- a big if -- we still must resolve delivery system issues, which are complicated and something (on which) members have deeply held differences of opinion," Breaux said.

Other Democrats fear most Medicare beneficiaries would not be able to afford private health plans that cover needed drugs. Those lawmakers would add a new prescription drug benefit to the existing Medicare system rather than rely on the private sector to come up with a solution.

LOAD-DATE: March 21, 2002