PRO: Is Medicare Drug Benefit Legislation Heading in Right Direction?-Yes: Private Option Starts Market-driven Reforms

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Legislators in both houses of Congress have approved a prescription drug benefit that would be the biggest expansion of Medicare in the program’s history, but they still have a long way to go before the new benefit becomes law.

The House and Senate passed different Medicare bills after heated debate last month. Congressional negotiators now must sit down to reconcile the differences between the two to come up with one bill that they hope to pass by the August recess.


Both bills create a stand-alone prescription drug benefit that seniors on traditional Medicare could buy for about $35 a month. Both also would create a new option for seniors to join private health plans, such as preferred provider organizations, that would incorporate drug coverage and other benefits into a complete health plan.

While much of the legislation is seriously flawed, there are nuggets that can be mined to transform the program for the better for seniors and taxpayers.

For starters, the negotiators should throw the Senate bill out the window and work instead with the better House bill.

The stand-alone drug program in the Senate bill will almost certainly lead to a system of price controls and restrictions on access to new drugs. Further, it keeps the PPO option more tightly under the thumb of government bureaucrats and is less likely to give seniors viable choices.

And seniors do want choices. A poll conducted recently by Zogby International for the Galen Institute showed that 82 percent of voters surveyed and 67 percent of seniors agree that “seniors should have the option of picking a private health plan approved by the Medicare program to provide their health benefits.”

When the complex Senate drug benefit was described to seniors who have drug coverage to ask if it would be better than the coverage they have now, 74 percent of seniors said no and only 16 percent said it would be better.

The House drug benefit is equally complicated and isn’t much more popular. Clearly, the Congress needs to go back to the drawing board on the stand-alone drug plan.

Instead of pretending they are insurance actuaries, Congress should get down to the important business of fixing the Medicare program so that it can keep pace with the health-care needs of today’s and tomorrow’s seniors.

Injecting competition into the program would put Medicare on a track to begin to offer the same comprehensive, quality health coverage that members of Congress and 9 million federal workers and dependents have enjoyed for 43 years.

Seniors would be able to choose from a range of competing private health plans that are approved by Medicare, with the federal government still picking up most of the tab.

Satisfaction is high among federal workers because when health-care plans compete for consumers’ business, they offer better, more affordable options. “If choice is good enough for lawmakers, it is good enough for America’s seniors,” President Bush has argued.

Further, the new private health plans wouldn’t need an act of Congress to add a new benefit or technology.

Medicare needs to change. Dartmouth Medical School researcher Elliott Fisher estimates that 30 percent of Medicare spending is wasted on unnecessary or even harmful medical services because no one is helping seniors to coordinate their care in an increasingly complex medical world.

The bill approved by the House is a good starting point to give seniors the choices they need today and to protect taxpayers from runaway Medicare costs tomorrow.

To see this article, go to:

To read Paul Guppy’s companion article, go to: “CON: Is Medicare Drug Benefit Legislation Heading in Right Direction?”

”’Grace-Marie Turner is president of the Galen Institute. Write to her at Galen Institute, P.O. Box 19080, Alexandria, VA 22320. Distributed by Knight Ridder News Service.”’