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Bush vs. Gore: The Political Battle Over Prescription Drug Coverage for Seniors
No issue is galvanizing public opinion in the November presidential election quite like prescription drug coverage for seniors. The subject has become a lightning rod for Republican Gov. George W. Bush of Texas and Democratic Vice President Al Gore because it involves two hot-button topics — health care and Medicare reform.
Voters' beliefs about health care and Medicare most definitely will influence their choice for a new leader, according to a July 2000 survey conducted by the Kaiser Family Foundation, the Harvard School of Public Affairs, and The Washington Post. The survey shows that when voters combine their concerns about health care and Medicare reform, 44 percent of them rank health care as the most important issue for deciding their vote for president.
|Medicare and prescription drug facts
Source: The Kaiser Family Foundation
There are several similarities in the prescription drug plans proposed by Bush and Gore. For example, both would offer free coverage to the poorest seniors and partial subsidies to those with higher incomes.
The differences develop over the size of the subsidy and the delivery of the benefits. Should prescription drug coverage come via the 35-year-old Medicare program or through private insurers?
Gore's plan, which would cost $253 billion over 10 years, would rely on the federal government to oversee a prescription drug benefit for all Medicare recipients. Currently, Medicare beneficiaries have no drug benefits unless they are enrolled in a Medicare+Choice HMO or have purchased supplementary insurance. Medicare beneficiaries spend an estimated $20 billion a year on supplementary insurance, according to the Health Insurance Association of America, a Washington, D.C., trade organization.
Gore's plan also would pay half of the first $5,000 in drug expenses each year. It would limit out-of-pocket expenses for drugs to $4,000 a year — after that, Medicare would pay 100 percent of the remaining costs.
The Bush plan, which would cost $158 billion over 10 years, is philosophically different. He would invite private insurers to compete for seniors' health insurance with a menu of plans, some including prescription drug coverage. Under Bush's plan, the government would pay 25 percent of a senior's private health insurance premiums. It would cap a senior's out-of-pocket prescription drug expenses at $6,000 per year.
Bush's plan also would set aside $48 billion over four years to fund an immediate drug benefit for the poorest seniors. This "quick fix," funded by the federal government, would be administered by the states. However, only 16 states have drug-assistance programs in operation. Six others have passed laws to start such programs.
But the governors don't want the responsibility for administering a prescription drug program and they said so at the National Governors Association (NGA) annual meeting held in July. "If Congress decides to expand prescription drug coverage to seniors, it should not shift that responsibility or its costs to the states," according to the NGA's policy statement on the prescription drug issue. Some governors are worried they would get stuck managing the program for an undetermined length of time, rather than handing it back to the government in four years as Bush has proposed.
Bush's emergency drug benefit really aims at delivering upfront relief to seniors while buying time until a more studied approach can be put in place, according to Tom Miller, director of health policies studies at the CATO Institute, a nonpartisan public policy research foundation headquartered in Washington, D.C.
Can either plan work?
While voters struggle to figure out which plan would work better, accusations fly between the opposing camps. Gore claims the Bush plan would force seniors into privately run HMOs while Bush insists Gore's plan would push seniors into federally run HMOs.
Neither charge is accurate. Gore's program would allow seniors to remain in the traditional Medicare program, with drug benefits managed by a private firm, but they wouldn't have to join a managed care plan. Under the Bush package, seniors would have the flexibility to choose among competing insurers' private plans, but they could also choose to stay in their current Medicare, Medicare+Choice, and Medigap supplementary plans.
Forty-five percent of American adults say they aren't sure which plan they prefer, according to a survey of 1,006 adults by the Guideline Research Group, an independent firm based in New York City. Of the remaining 55 percent, 32 percent favor the Gore plan and 23 percent prefer the Bush proposal. The telephone survey was conducted Sept. 14 to 17. The poll's margin of error is plus or minus 3 percentage points.
"Both plans lack specificity," charges Tricia Smith, AARP's chief lobbyist for health insurance issues. According to Smith, consumers say there's a clear need for a prescription drug benefit for seniors, but they don't have a good sense of how it should be delivered.
Another big concern for voters is who to trust more (or mistrust least) to set premium prices on the benefit: the government or private insurance companies. The Guideline Research Group survey shows more Americans (27 percent) say the government should set the cost as compared with only 11 percent who say the insurers should. The majority says neither or they're not sure.
This hesitancy may stem from some voters' suspicions about the feasibility of both plans. Neither federally managed Medicare HMOs nor private insurers were able to contain rising health care costs during the '80s and '90s.
Some voters are concerned that Gore's federally managed program would react too slowly to changes in the volatile health care market. For the past three years, Medicare officials have been insisting their payments to member HMOs are more than sufficient to cover costs, yet there's been a three-year exodus of Medicare HMOs from the market.
Citing inadequate reimbursements from the federal government, more than 100 health insurers are dropping their HMO plans beginning Jan. 1, 2001, leaving nearly 1 million beneficiaries nationwide scrambling for coverage; in January 2000, 327,000 seniors were dropped.
Neither federally managed Medicare HMOs nor private insurers were able to contain rising health care costs during the '80s and '90s.
In an attempt to address this problem, Gore has proposed doubling to two years the minimum period for HMOs contracting with the government to provide health care to Medicare beneficiaries. He also would double the penalty for HMOs who drop patients, barring them from rejoining Medicare for two years. He also wants to authorize the secretary of health and human services to permanently ban HMOs that prove to be picking healthier beneficiaries by dropping out of regions with a higher number of claims.
These proposed safeguards would offer seniors some protection against managed-care pullouts, but it may very well result in even fewer Medicare HMOs contracting with the government in the first place.
How did Medicare HMOs end up in such trouble?
And just how did Medicare HMOs wind up in such dire straits? In part, because they were overwhelmed with the sickest beneficiaries needing prescription drug coverage, who jumped ship from traditional Medicare to take advantage of the drug benefits offered by managed care plans.
The Bush campaign has not addressed the growing concern that, under his plan, the least healthy seniors would swamp private health plans that offer attractive drug benefits, either driving up premium costs to unacceptably high levels or causing the plans to collapse altogether.
The Bush plan — with its heavy reliance on private insurers — makes many Americans uncomfortable, according to Steven Kull, director of the Center on Policy Attitudes (COPA), a non-partisan, non-profit social science research organization based in Washington, D.C.
"The public is conflicted on how much they should rely on the government," Kull says. "Yet Medicare and Social Security have a fairly good reputation and people have confidence in them. With private insurers, they're not sure what they're getting into. Their thinking is that it's better to stay with the devil that they know."
Americans also are concerned about what they perceive as profiteering in the private health care industry. Two-thirds of the respondents in a COPA study agree with the statement that the "profits that are made in the health care industry" are "higherthan profits in most industries." The survey, called Americans on Health Care Policy, randomly polled 652 adults and was published Aug. 30. In COPA focus groups, there was no shortage of complaints that the private health care industry is too focused on profits.
Time for voters to take their medicine
Political analysts like Marilyn Moon, a senior fellow at the Urban Institute, a nonpartisan economic and social research organization based in Washington, D.C., say consumers have to take some responsibility for their own part in the health care crisis. "People are being very unrealistic," Moon says. "Everyone wants someone else to deal with the problem."
Although a majority of consumers say it's the government's responsibility to ensure universal health care, they're against the idea of significantly raising taxes to do so, according to the COPA survey.
"The public is conflicted on how much they should rely on the government."
The survey also found that public support for controlling medical costs through restrictions on their usage and benefits, including prescription drug benefits, has disappeared since the early '90s, the heyday of managed care organizations.
No matter which candidate is chosen this fall, his plan would evolve as it moves through Congress, the body that actually wields the most power in the ultimate passage — or defeat — of any prescription drug benefit legislation. Such was the case in 1994 when Congress tanked President Clinton's sweeping health plan, deeming it too complicated and ambitious.
Besides the Bush and Gore proposals, several senators are pushing their own versions of Medicare drug coverage. And the competing interests involved — drug companies, doctors, hospitals, insurers, and senior citizens — are among the most powerful political forces.
It's clear there will have to be a compromise this time around, Moon says. "If you hold out for the absolute best, you'll get nothing."