Debate over adding prescription drugs to the Medicare benefit package took a partisan turn last week as President Clinton publicly bashed a House Republican plan and trumpeted a report that claimed to show high inflation in the prices of drugs used most by seniors.
While House Republicans continued a spring recess, Clinton took the opportunity at a White House press conference to slam a plan touted by House Speaker J. Dennis Hastert (R-Ill.) that seeks to expand coverage of prescription drugs through private-sector insurance plans, with federal subsidies for low-income Medicare beneficiaries.
"It would do nothing for those seniors with modest middle-class incomes between $15,000 and $50,000," Clinton said. "Nearly half of all the Medicare beneficiaries who lack prescription drug coverage fall into this category."
Clinton cited rising prescription drug costs as a reason to enact a prescription drug benefit. Those rising costs were documented in a report from the liberal group Families USA, which showed that the price of the 50 drugs most commonly used by senior citizens rose, on average, close to two times the rate of inflation.
Clinton's plan, costing $38.1 billion over five years, would subsidize half of all Medicare beneficiaries' drug purchases up to $2,000 initially, building to $5,000 after a phase-in that would end in 2009. Premiums would be $26 a month initially and $51 a month by 2009. Low-income seniors would pay no premium or do cost-sharing.
The House GOP plan is expected to cost close to $40 billion over five years.
In response, Rep. William Thomas (R-Calif.), chairman of the House Ways and Means Committee's health subcommittee, criticized Clinton's drug plan for offering no coverage once seniors' costs exceed the limits. The GOP plan includes stop-loss coverage.
The success or failure of a prescription drug benefit could have financial implications for providers as they seek to reverse payment restraints enacted under the Balanced Budget Act of 1997.