TOPICS > Health

Background: Medicare Coverage

July 12, 2001 at 12:00 AM EDT


PHARMACIST: Two puffs four times a day.

SUSAN DENTZER: Of all the problems confronting Medicare, the lack of coverage for most prescription drugs consumed outside the hospital may pain beneficiaries the most.

ANNOUNCER: The President of the United States –

SUSAN DENTZER: President Bush talked about the problem in a White House speech today.

PRESIDENT GEORGE W. BUSH: In 1965, prescription drugs meant antibiotics. Today illnesses that once only could be treated by invasive surgery are treated instead with effective new drugs. But these new drugs can be very expensive and under the current system, Medicare doesn’t pay for them.

SUSAN DENTZER: The President said a broad reform of Medicare was needed to keep it financially strong, while still adding coverage for prescription drugs. And he unveiled a plan that he said would save money for seniors while Congress undertakes the hard work of revamping the program.

PRESIDENT GEORGE W. BUSH: Every senior on Medicare can receive a new drug discount card. It won’t cost much– at most a dollar or two a month– and will work like the card that you already have for, say, your groceries. Present the card at a participating pharmacy and you receive a substantial discount. It’s as simple as that.

SUSAN DENTZER: And conceivably, a simple solution for more people like 84-year-old Marjorie Smolka. A breast cancer survivor, she takes seven different medications costing about $400 a month.

MARJORIE SMOLKA: I take Synthroid for thyroid, and I take Digoxin for the irregular heartbeat. I’ve taken so many medicines. My body needs a lot of help.

SUSAN DENTZER: Smolka’s already familiar with the type of pharmacy discount plan the President proposes. That’s because she’s one of thousands who already belong to groups that provide these discount cards for seniors, either for free or for a small annual fee. Smolka’s card is issued by the AARP, and she uses it at her local pharmacy.

MARJORIE SMOLKA: They put my card in their computer and give it to me for half price, and that’s a tremendous help. I can’t imagine not having a card anymore. I mean, it would really change my way of life.

SUSAN DENTZER: White House officials say they hope to enlist several large companies, known as pharmacy benefit managers, in helping to make discount cards available to all 40 million Medicare beneficiaries next year. But the President stressed today that the card program was only an interim step, and he set out guidelines to govern the larger task of reforming Medicare.

PRESIDENT GEORGE W. BUSH: Medicare plans will be competitive by offering better services and lower premiums. Medicare will respond better to the needs of seniors and especially low-income seniors with high medical bills. And Medicare will be put on sound financial footing.

SUSAN DENTZER: Criticism of the drug discount plan came on several fronts. Pharmaceutical manufacturers and pharmacy chains worry that the drug discounts may come at their expense. For example, in a letter to the President, members of various pharmacy groups said they opposed “government-mandated prescription discount card programs because they are price controls on pharmacies.” In Congress, Democrat leaders lambasted the discount plan and called for faster moves to provide full Medicare drug coverage.

REP. RICHARD GEPHARDT: This is the ultimate in illusion, trying to create the impression that they really are doing something for people with this problem.

SEN. TOM DASCHLE: I’m hopeful that now that we get beyond the rose garden, we can sit down, find common ground, and make what ought to be a commitment to every senior citizen the reality before the end of the year, and that is a meaningful, universal, voluntary system that seniors can count on to provide access to drug coverage they don’t have today, not the storefront promise of yet another gimmick.

SUSAN DENTZER: Bush administration officials say they believe the discount card program could be created without legislative approval from Congress. But the broader Medicare reform efforts will now move to Capitol Hill, where they face an even more uncertain fate.