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President Bush Unveils Options for Medicare Drug Benefit

by Stephen Barlas

Geriatric Times

May/June 2003

Vol. IV

Issue 3

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Both Democrats and Republicans in the U.S. Congress seem committed to approving at least $400 billion for a new Medicare outpatient drug benefit. But Democratic efforts to up the ante and expand President Bush's three-tiered drug program seem destined to failure. The latest evidence of that was the 55-44 vote in the Senate on March 20 against adding an additional $219 billion to the $400 billion, 10-year total proposed by President Bush.

Democratic presidential contender Sen. Bob Graham (D-Fla.) complained, "The president's proposal buys a drug benefit for $400 billion by providing a benefit ... only for those seniors who will enroll in some form of managed care."

Medicare recipients would have three options under the Bush plan. With regard to prescription drugs, all Medicare recipients would immediately get a drug card that the president says will give them discounts of 10% to 25%. Those who choose to stay in the traditional, fee-for-service Medicare would have their prescription costs covered after payment of a very high deductible, which Bush did not establish. He expects Congress to do that. Low-income recipients in basic Medicare would get some subsidy of drug expenditures below the deductible.

However, the president hopes to usher most seniors into one of the two managed care options, which would have enhanced prescription benefits and better preventive care and disease-management benefits. An HMO/PPO would be the centerpiece of the Enhanced Medicare option. Recipients would pay separate co-pays and deductibles as the price for getting a better drug plan. The benefits of the plan would be standard throughout the country. The third option, Medicare Advantage, would offer a much cheaper, stripped down managed care option based on the current Medicare+Choice program. Drug benefits would vary considerably based on the plan chosen. The prescription benefits in the two managed care options might not kick in until 2006.