Ron Pollack, executive director of Families USA, the non-partisan, non-profit national organization for health care consumers, today issued the following statement in response to the announcement of Gov. George Bush's proposed Medicare/prescription drug plan:
"It is disappointing to learn that Gov. Bush proposes to spend more money on people who have already died - through repeal of the estate tax for the wealthiest 2 percent of the American population - than he spends to strengthen Medicare and to provide needed prescription drug coverage to seniors," Pollack said.
"Unlike a prescription drug benefit in Medicare, which would provide guaranteed, comprehensive coverage and cost containment, Gov. Bush's plan would leave seniors paying very high out-of-pocket costs without offering guaranteed, comprehensive coverage. At the same time, Gov. Bush's plan offers inadequate protection for people with high medical costs and does not address the problem of rapidly-rising prescription drug costs."
Families USA's analysis of the Bush plan follows:
Structure - In its first four years, Gov. Bush's plan would send $48 billion to the states to help seniors pay for prescription drugs. But past experience has shown the states have only been able to cover small portions of those who need prescription drugs. The result is a patchwork quilt, rather than the comprehensive coverage afforded by a Medicare benefit. The National Governors' Association has already rejected making prescription drug coverage a state matter, saying, "If Congress decides to expand prescription drug coverage to seniors, it should not shift that responsibility or its costs to the states."
Further into the future, Gov. Bush's plan would provide drug coverage through HMOs and private insurance companies, even though many insurers already are leaving the Medicare-HMO market and despite the fact that private insurance is so expensive that only 8 percent of Medicare beneficiaries currently purchase private Medigap insurance coverage that includes prescription drugs.
If Gov. Bush's plan was enacted by Congress, it would still fall short in the breadth of its coverage by focusing on low-income seniors rather than offering a benefit to all seniors. While the plan is designed to help seniors living below 133 percent of the federal poverty level ($11,300 annual income) and phases out at 175 percent of poverty ($16,700 annual income), millions of seniors still would be left without coverage. Seniors with incomes marginally higher would still find their drug needs unaffordable.
A prescription drug benefit in Medicare avoids these problems. It offers coverage for all seniors through a well-established insurance system. It offers the reliability of Medicare's guarantee, a benefit that is specified in federal law. And it helps contain rising costs through Medicare's market clout vis a vis the pharmaceutical companies.
Fiscal commitment - Gov. Bush proposes spending $158 billion over 10 years to strengthen Medicare and provide prescription drug coverage for seniors. (By contrast, he proposes eliminating the estate tax, which would benefit the richest 2 percent of Americans, at an estimated cost, once phased in, of more than $50 billion per year.) Of this $158 billion, $48 billion would be sent to the states over the next four years to help provide prescription drug coverage for seniors. Because of this limited financial commitment, Gov. Bush's plan does little to help seniors with their out-of-pocket spending for prescription drugs, which is expected to double in the next 10 years. As a result, millions of seniors still face the prospect of rapidly-rising costs, but little real relief.
Benefits - Gov. Bush's plan suffers from a fundamental weakness by not offering guaranteed prescription drug coverage. Seniors want and need the predictability of a specific, defined benefit they can count on.
In the first four years, Gov. Bush's plan would turn over the task of prescription drug coverage to the states, which would lead to a system of uneven coverage from one state to another. Further, seniors would have no assurance of stability in that coverage. The benefit levels and cost sharing - such as deductibles and copays - would vary considerably, unlike a defined benefit in Medicare.
This problem is not cured if HMOs and insurance companies implement the drug plan. Based on our experience with Medicare + Choice plans, seniors would be unable to predict what coverage is guaranteed and what costs they will have to pay.
