Congress' discussion on how to extend Medicare coverage to prescription drugs is echoing a debate as old as the program itself: Should Medicare be a program for all senior citizens or just the poor ones?
While congressional Democrats and President Clinton push for a universal program under which Medicare would help all seniors cover some of their drug costs, congressional Republicans want to subsidize only poor seniors and those with high drug costs, relying on the private sector to provide that coverage.
The same fault line was present in 1965, when Medicare was created, and led to today's mishmash of federal healthcare programs, with Medicare Part A covering institutional care from a dedicated trust fund financed by a payroll tax; Part B covering physician care and other treatments, largely from the general fund; and Medicaid covering poor people through a variety of state programs.
"The Republicans wanted to cover the poor back in 1965 (when Medicare was enacted), and Democrats wanted to cover everybody with a chintzy policy. We got both," says Robert Reischauer, president of the Urban Institute in Washington.
The stakes are high in what is otherwise a philosophical debate among healthcare policy analysts and scholars. Liberals argue that a drug benefit that helps only low-income Medicare beneficiaries would represent the first step toward turning a universal program into a welfare program, with little public support either from seniors or from the taxpayers funding the program.
"One of the contributors to Medicare's tremendous success has been that it has been a universal entitlement to mainstream medical care," notes Judy Feder, dean of policy studies at Georgetown University who served on President Clinton's healthcare reform team in 1993.
Congressional Republicans want a program that would make private-sector drug-coverage insurance plans available to all Medicare beneficiaries, but would subsidize premiums only for low-income seniors.
President Clinton proposes creation of a Medicare Part D, in which seniors can voluntarily enroll. In 2009, when fully phased in, beneficiaries would pay $575 a year to enroll in Part D, which would pay for half of beneficiaries' prescription drug purchases up to $5,000.
The program would rely on pharmacy benefit managers to control expenditures by negotiating price discounts with manufacturers and limiting utilization.
Many conservatives argue that Congress should add a prescription drug benefit only if Medicare undergoes comprehensive reforms that encourage more seniors to join private-sector Medicare health plans. They propose doing that by making Medicare a program in which the federal government pays most, but not all, of seniors' premiums for joining private health plans.
But the politics of a presidential election year have pushed even the conservative GOP leadership into endorsing a stand-alone prescription drug plan, albeit one with a private-sector twist. But critics say such a coverage plan gives little incentive for healthy seniors to join, making it prohibitively expensive for seniors who don't receive a full government subsidy.