President Clinton's call for Medicare to cover prescription drugs has provoked a four-way tug of war on Capitol Hill, with healthcare interest groups battling over how to fund coverage and lawmakers fighting for political advantage.
Although Congress has taken virtually no action on the issue, Congress and the White House are busy drafting legislation and working behind the scenes to develop campaign strategies that use the prescription drug benefit as an issue.
"As of now, we are headed for a collision course of the political parties on this issue," said Sen. Ron Wyden (D-Ore.), who, with Sen. Olympia Snowe (R-Maine), last week unveiled a bipartisan plan to cover prescription drugs. "I think there's a choice for the political parties: You can have a fight on an issue or you can do something constructive," Wyden said.
Senior groups, meanwhile, want to make sure that funding is available for an expansion of the Medicare benefit package. But they may be fighting over the same surplus federal dollars that providers want Congress to use to boost payments that were cut under the Balanced Budget Act of 1997.
Hospitals contend that the law will trim nearly $71.2 billion, or 10.5%, from hospital payments over five years when compared with previous payment formulas, or one-third more than the law was projected to cut at the time.
Both seniors and provider groups said they believe the federal surplus, now projected to be more than $111 billion in federal fiscal 1999, is large enough to fund both the prescription drug benefit and the changes to payment policies.
But hospitals, for one, are making clear where they think the money should go should Congress have to choose.
"We think that we have contributed so much to how they (achieved) a surplus that it only is fair that they first pay adequately for the benefits that already exist," said Richard Pollack, executive vice president and director of government and public affairs for the American Hospital Association.
Robert Reischauer, a former director of the Congressional Budget Office who now is a senior fellow at the Brookings Institution in Washington, said that despite the likely popularity of a prescription drug benefit, providers still could prevail.
"It could be that the effort to provide some targeted relief to some providers will come front and center and detract from the prescription drug benefit," Reischauer said.
But senior groups argue that adding prescription drugs to the Medicare benefit package is important to Medicare's future.
Without it, beneficiaries will have a harder time obtaining ever-more-costly pharmaceuticals, which also are taking on a greater role in controlling and preventing diseases caused by aging, the senior groups said.
The first salvo on the issue was fired earlier this year, when Clinton, in his State of the Union address, called for Medicare coverage of prescription drugs.
Recently disclosed documents outlining Clinton's drug-coverage plan-due out almost any day now-said Medicare will rely on pharmacy benefit managers to control costs and utilization. Those documents cite numerous studies that argue that the increase in Medicare drug expenditures could be offset by reductions in hospital and nursing home costs.
But John Rother, legislative director for the American Association of Retired Persons, said, "They're not going to make that argument."
At a recent Senate Finance Committee hearing, HCFA Deputy Administrator Mike Hash acknowledged that some prescription drugs actually increase overall healthcare costs; others decrease costs.
"What the net of that is we don't know yet," Hash said.
At the same time that Clinton began pushing his plan, the National Bipartisan Commission on the Future of Medicare developed a long-term reform strategy that proposed Medicare coverage for prescription drugs for Medicare-eligible individuals with incomes of up to $10,568, or 135% of the poverty level.
That benefit came within a larger reform plan that envisioned more seniors enrolling in private-sector health plans, with premiums paid mostly by Medicare.
The commission's co-chairman, Sen. John Breaux (D-La.), now is preparing a long-term Medicare reform bill that aims to cover prescription drug costs for seniors earning more than 135% of the poverty level.
Jockeying continued in the budget blueprint Congress passed in April, which reserved the surplus for Medicare-including a potential prescription drug benefit-and Social Security reform.
But despite the early skirmishes, the effort may not amount to more than raising an issue for the 2000 election.
Democrats are trying to retain the White House as Clinton's second term ends and to regain the House of Representatives, which Republicans have held since 1994.
With Republicans holding only a slim five-vote majority, Democrats are going to try to push hard on such issues as healthcare, where they tend to have an advantage over the GOP among voters. Offering seniors a prescription drug benefit is likely to be very popular.
"I think a lot of Democrats will run on the necessity of providing a prescription drug benefit," Reischauer said. "It will put a lot of Republicans in a very tough position."
It also may eclipse managed-care reform, which has been the centerpiece of Democrats' healthcare agenda for at least two years. "You'll turn out more voters on prescription drugs than over managed care," said Mary Nell Lehnhard, senior vice president of policy and representation for the Blue Cross and Blue Shield Association.
But a Democratic push may also force action from the Republican leadership, which will fight to preserve its majority.
"The question that I've been asking is, are the Democrats going to push this so hard that the Republicans have to respond?" said Howard Bedlin, vice president for public policy and advocacy at the National Council on the Aging. "That will probably happen next year."