Less than six months after President Clinton called for the government to offer all elderly patients coverage for prescription drugs, the idea has caught political fire.
Taking advantage of the issue's popularity with Americans of all ages, the White House has missed no opportunity to remind the public that drug benefits will be a prime feature of a Medicare reform plan it is preparing to release this month. And on Capitol Hill, politicians of both parties are tripping over one another to declare their desire to make medicines more affordable for the elderly.
But as the administration and Congress strive to translate their rhetoric into reality, they are discovering how difficult it is to design a plan that is both politically palatable and fiscally sound--raising the question of whether a prescription drug benefit will be much more than fodder for the campaign trail next year.
Clinton and his aides have reviewed more than 50 versions of a drug benefit, but they still have not resolved some of the most fundamental questions--such as how much the government would chip in and how much patients would pay.
"I think what they're finding out is that it's harder than they thought it was going to be . . . to put together a specific package," said Sen. John Breaux (D-La.), who led a Medicare reform commission that collapsed in a deadlock in March, and who now is in close touch with the White House about its plans.
Still, John Rother, chief lobbyist for the American Association of Retired Persons, which favors expanding drug benefits, said: "A few months ago, prescription drugs was a voice in the wilderness. Now it's the hot thing."
A creature of the 1960s that has swollen into the nation's second-largest social program, Medicare helps to pay the medical expenses of 39 million elderly and disabled Americans. Unlike most insurance plans for younger adults, it covers prescription drugs dispensed in hospitals, but not ones that people take at home. Even though many Medicare patients get help through employers' retirement benefits or by buying private insurance policies, at least one-third of them shoulder the entire bill.
Adding pharmaceuticals would be expensive--$15 billion to $45 billion a year, depending on how generous the benefits might be. That prospect is ticklish because of the fragile state of Medicare's finances, which analysts say will be inadequate to cover patients' hospital bills within about 15 years.
White House officials say they will identify ways to run Medicare more economically and to help patients pay for drugs. "Some of the modernization steps will lead to savings, and some will be . . . smarter health care policy," said Gene Sperling, director of Clinton's National Economic Council.
The obstacles to finding that balance were on display recently in the bipartisan Medicare commission that was created to guide Congress and the White House through reforms of the program. In the end, its members--most of them members of Congress-- could not muster the votes needed to formally deliver any advice.
Prescription drugs proved one of the commission's most contentious topics. In the end, Breaux and the panel's co-chairman, Rep. Bill Thomas (R-Calif.), proposed that the government begin paying for medicine only for Medicare patients with incomes less than about $10,000 a year. While other people should have the right to buy drug coverage, they said, the government cannot afford to subsidize it.
Now, Breaux is drafting his own Medicare reform bill that will offer more help.
Clinton declared that the commission had not gone far enough in helping patients afford drugs or in keeping the system solvent. But as his advisers began work nearly three months ago on a plan of their own, they quickly encountered Medicare reform's political and economic minefield.
According to several administration officials, the White House has reached certain tentative decisions. In an effort to appease many Republicans and some patients who already have insurance for their medicine, Clinton wants to permit people to refuse government coverage.
And to mollify the pharmaceutical industry as well as the GOP, the government would hire private companies to decide which medicines would be covered and negotiate the prices. The administration also wants to make sure that coverage is affordable for those who are relatively poor.
But even as Clinton's top aides promise publicly that their plan will be ready by the end of June, many issues remain unresolved. Clinton has told his advisers, for example, that the extra monthly premiums charged to patients must be less than $90--roughly the amount they would pay for private drug coverage--but they have not decided how much less it will be.
Keeping those premiums low will be more difficult given the administration's decision to allow elderly Americans to choose whether or not to take the benefit. Unless the coverage is a good deal, it could attract only people with severe health problems--and thus could become more expensive. But keeping premiums, deductibles and co-payments low would require more federal money--a hazard for a program already forecast to go broke.
And if patients had to pay too much, Breaux said, the government could risk repeating its disastrous experience with Medicare reforms of the late 1980s, which Congress swiftly repealed after people who already had private drug coverage protested that the government was starting to charge them more.
One Clinton aide said the administration hopes to find money for drug subsidies mainly from other Medicare savings it will recommend, such as greater use of competitive bidding among HMOs and other providers of health care. But the aide said it is possible that the subsidies would have to come partly from future federal budget surpluses that Clinton wants to use to help keep the program solvent--but that Republicans would prefer to use for a tax cut.
"Any time you are putting out detailed proposals in major entitlement areas like Medicare, you have to be prepared for some controversy and opposition," Sperling said. "But we are confident we'll have a balanced proposal that will be capable of getting bipartisan support."
Staff writer Charles Babington contributed to this report.
Prescription Drug Coverage
The cost of prescription drugs has grown rapidly in recent years, and Medicare patients without drug coverage take substantially fewer medications than those who are covered.
Drug coverage of Medicare enrollees
35% Not covered
Percent using prescription drugs
Not covered 81%
Average number of prescriptions
Not covered 15.3
SOURCES: Health Affairs, HCFA