Pilloried by Vice President Al Gore for not giving specifics, Texas Gov. George W. Bush struck back in early September by announcing a sweeping plan to overhaul Medicare, including adding limited prescription drug coverage. While doctors and other interest groups have kept mum about what they think of the plan, healthcare policy experts questioned the realism of Bush's plan.
"I think very little will happen under this plan," says Paul Ginsburg, president of the Center for Studying Health System Change in Washington. "I believe what insurers say when they said that prescription coverage wouldn't be viable in the absence of subsidies," which the Bush plan does not include.
Sara Rosenbaum, a professor of health law and policy at George Washington University's School of Public Health, agrees.
"It's not clear that it (the Bush plan) would ever work and would be incredibly hard to pull off in any short time period," Rosenbaum says.
At its core, Bush's proposal outlines a quintessentially Republican position: Government should fund changes to be undertaken by the private sector and states. In his two-step program, Bush would give grants to states to provide drug coverage to needy seniors. Then a federal subsidy program would help beneficiaries buy coverage through health plans.
Under the Bush plan, Medicare beneficiaries would have the option to buy their coverage through the private sector, including, but not limited to, prescription drugs. Beneficiaries also would have the option to remain in traditional Medicare, with or without supplemental drug benefits. Bush modeled his plan after proposals made by the Bipartisan Medicare Commission.
Bush plans to spend $198 billion over the next 10 years: $110 billion to overhaul Medicare; $48 billion to provide needy seniors with drugs; and $40 billion to restore reimbursement cuts to providers. Funding would come from a projected budget surplus.
In effect, the Bush plan moves Medicare from a defined-benefit program to a defined-contribution program; health plans would have the freedom to decide how to provide the required benefits, including co-payments and deductibles. While Medicare recipients can now join Medicare+Choice plans, the Bush plan would give them a check to purchase coverage directly from private companies. If patients bought a plan that cost less than the government's contribution, they could pocket the difference. If they chose a plan that cost more, they would have to pay the difference.
Gore, by contrast, would subsidize the voluntary purchase of supplemental prescription drug benefits through Medicare itself. The federal government would determine co-payments, deductibles and other benefit rules.
The problem, Rosenbaum says, is that market forces cannot be relied upon to enroll Medicare's 38 million recipients. She cites the recent example of health plans pulling out of Medicare+Choice markets in droves this year due to losses principally caused by huge increases in drug benefit costs. Private insurers will naturally pursue the healthiest risks, so if the Bush plan is passed, it will leave the sickest and most costly recipients in traditional Medicare, making it even more financially precarious, she says.
Ginsburg agrees: "Unless there was a huge subsidy . . . I'm skeptical that this market would be viable."
He did laud one aspect of the Bush plan, however, its emphasis on reforming Medicare. Gore has made few suggestions in that area, with the exeption of adding prescription drugs as a benefit, Ginsberg says.
While healthcare policy experts had definite opinions on the Bush plan, few doctors' groups did. Several interest groups declined to comment on the proposal, citing their not-for-profit status and disinterest in commenting on the plans until after the elections.