PRICEY PRESCRIPTIONS

June 27, 2000
		After a background report by Susan Dentzer, two members of the House Ways and Means subcommittee on health debate plans to include precription drugs onto Medicare coverage. The Health Unit is a partnership with the Henry J. Kaiser Family Foundation.

Remaking Medicare June 27, 2000: Pricey Prescriptions April 12, 2000: Medicare Rx Feb. 15, 2000: Rx for Reform Focus: The State of the Union June 29, 1999: Prescribing a Plan June 28, 1999: Medicare Rx March 28, 1999: Medicare from all sides March 28, 1999: President Clinton outlines his plan. March 17, 1999: What Next? March 16, 1999: The Medicare Commission has no recommendation. Feb. 25, 1999: The Medicare Commission at work Forum: How should Medicare be reformed? Nov. 3, 1998: Some HMO's won't cover Medicare patients anymore Forum: When HMO's won't accept Medicare. Jan. 6, 1998: Expanding the Medicare net Aug. 7, 1997: Medicare and the budget. The NewsHour's Health Spotlight. Browse the NewsHour's coverage of Medicare and Health   The Senate Special Committee on Aging The National Bipartisan Commission on the Future of Medicare The National Coalition on Health Care Alliance For Health Reform The National Coalition on Health Care The government site for Medicare information	MARGARET WARNER: For more on both plans and their prospects, we turn to two members of the House Ways and Means Subcommittee on health. Republican Congressman Bill Thomas of California, chairman of the subcommittee, and the ranking Democrat, Congressman Pete Stark, who's also from California. Welcome, gentlemen. Chairman Thomas, what is the advantage of the Republican plan, as you see it, over the President's? REP. BILL THOMAS, (R) California: Well, it depends on which plan of the President's you're addressing. If it was the one that he introduced originally in his budget... MARGARET WARNER: Let's stick with the one he has on the table now. First tell us about yours. REP. BILL THOMAS: If you look at the one he has on the table now, it costs between $80 and $100 billion. The budget resolution, both in the Republican budget and the Democratic budget said we had only $40 billion to spend. So first of all, it busts the budget. But most importantly, the Republican plan decides that seniors want prescription drugs, but they want them by choice. Freedom of choice is a proposal we have in our plan that's not available in the Democrats' plan. This is a Medicare program that, as we say, is an entitlement. It's just like the doctor payment and the skilled nursing home payment. And so we say, let them have a choice. If they like the program they have now, let them stay with it. If they don't like it, certainly this would be available to them. But the real advantage is what the President just announced, as you saw. He has now decided to add the so-called stop loss or catastrophic, the idea that seniors above a certain amount of money should not have to pay any more out of their pocket to get the drugs they need. This was an integral part of the bipartisan plan from the beginning, working with responsible Democrats to guarantee that we have insurance for all. The President's plan was a one-size-fits-some. He's now added that insurance provision, and as your chart showed, he doubled his costs. If you're going to put a program that doubles its costs with that one item added, then look at ours. We stay inside the budget. It's a Medicare program. It's insurance for all. And most importantly, it provides seniors choice. They can choose between plans or keep the one that they have if they like it better.
	A contrasting plan
	MARGARET WARNER: Congressman Stark, give us your sense of the relative merits of these plans and explain why the President's plan costs twice as much. Are the benefits twice as good? REP. PETE STARK, (D) California: Yes. Precisely. You get what you pay for. There is no health care fairy who's going to put prescription drugs under the seniors pillows at night without all of us and/or the seniors paying for something. It's illusionary to think otherwise. The Democrats have a bill which says, this will be a Medicare benefit that is an entitlement that is guaranteed by the federal government, and it will be the same price in every part of the country, which the Republicans will not. The Republicans may or may not offer a bill, because they have no assurance that the insurance companies will provide it. In the last analysis, the Democrats' bill could under extreme circumstances be actually distributed and paid for directly by the government. It's very unlikely, but it is that underlying guarantee that would do that -- as we used to do in Medicare. We used to pay the bills directly for Medicare out of Health and Human Services. So we have a plan that costs $25 a month. It will provide limited benefits up to $4,000, provide half of the drugs up to $5,000. It will have a $4,000 out out-of-pocket cap. It should be more. We'd like to spend more. The reason we can't provide an alternative on the floor tomorrow is because the Republican budget, which they refuse to give us a waiver for, won't allow us to offer more. We'd be happy to come out with a bill that costs $100 billion, $150 billion and provide the seniors what they need. We should also be providing some cost containment. We have every Republican opposed bill recently, the Allen Bill, which we voted on in our committee, to provide seniors a discount, at no cost to the federal government. So they don't want to do anything that would hurt the drug companies, who, after all, are really writing this bill. It's the drug companies that are in the pockets of the Republicans, and they're fiddling, and the Republicans are dancing to their tune. MARGARET WARNER: All right. Let me see if I can focus on the two big differences. One has to do with the Democratic charge that the Republican plan, seniors aren't really guaranteed that the health insurance industry's going to offer these plans or that they'll be similarly offered all over the country for a similar price. What about that availability of coverage issue? REP. BILL THOMAS: Well, this is an argument that the Democrats like to make, but if you actually read the bills, and I know very few people read them, they're actually going to offer their program through private structure, which they negotiate the price with exactly the same way that we are. REP. PETE STARK: No, not exactly the same way. REP. BILL THOMAS: The key here is... REP. PETE STARK: It is not exactly the same way. MARGARET WARNER: I'll get right back to you. REP. BILL THOMAS: The key here is to realize that you heard Congressman Stark say that the government... REP. PETE STARK: You are in the pocket of the lobbyists. That's what I said. REP. BILL THOMAS: Margaret, can I... MARGARET WARNER: Congressman, let him finish and I'll get back to you, sir. REP. BILL THOMAS: Thank you very much ... that the government is going to run it. We don't think that seniors should have to make decisions about drugs with a bureaucrat looking over their shoulder, telling them which ones they should take and how they should take it. MARGARET WARNER: All right. But he me just ask you about this... REP. BILL THOMAS: Pete Stark said it was a government-run program. MARGARET WARNER: But the issue of whether seniors under the Republican are guaranteed there will be something available. In Susan's piece, she quoted a statement from the Health Insurance Association saying it simply would not work in practice. Will the insurance companies take part in it, and if they don't, what happens? REP. BILL THOMAS: The answer is yes. We have now two major insurance companies who have said they'd be glad to participate. The one that's probably most important is a company called Merk Medco. They currently provide the prescription drugs for more than 1,100 companies, more than 52 million Americans... more than 52 million Americans have the drug coverage from this company that says we want to participate. Now, the irony of this, is Merk Medco also supplies the prescription drugs for the federal employees health benefits program, the program that members of Congress have. So if someone who gives the members of Congress their drugs says, "we are willing to participate in the senior program," how can you say insurance companies won't play? MARGARET WARNER: All right, Congressman Stark. REP. PETE STARK: Yes, Margaret. What I'm suggesting is that the bill was written by the lobbyists for the drug companies, given to Mr. Thomas, who just is parroting what they want. First of all, the risk is not assumed by these... the risk is assumed by the private insurance companies who don't want the risk. They will only insure people that they can make money on. In the Democratic plan, the government guarantees that the benefits will be there. So this is the major difference. We have an entitlement that is like the rest of Medicare. And what Mr. Thomas is suggesting is something like the Managed Care Plus Choice plans, which are dumping seniors left and right. And he's trying to privatize Medicare. Make no mistake about it, this is an attempt to turn the program over to the free market -- the free market which leaves 12 million children uninsured, 45 million Americans uninsured. This is not the federal Medicare program which seniors have come to depend on since 1965 when we initiated the program because the private insurers refused to insure seniors.
	Spending more money
	MARGARET WARNER: All right. Congressman Stark, let me ask you a question placed on something the analysts said in Susan's piece, which is that the President's plan is so generous and it has no detectable and the senior is protected from out-of-pocket costs over $4,000 that it will encourage much greater use, it will be much more expensive than... REP. PETE STARK: Margaret, that's right, and I stipulate to that. As a matter of fact, I don't think the President's plan is generous enough. Seniors should have the drugs they need to stay healthy. There is nothing that's wrong with the federal government, when we have a trillion dollars extra in our budget surplus, the richest country in history at the most economically glowing time that the world has ever seen, that we can't afford to provide pharmaceutical benefits to seniors -- two-thirds of which live at a very modest income is obscene. And I'm willing to spend that money before I'd like to give $50 billion a year to the richest 2% by getting rid of the inheritance tax, which is what the Republicans are doing with this surplus. The Republicans want to cut taxes. That's all they want to do. I want to spend some of this surplus to protect the seniors, to see that they can live a decent life in their old age, get the kind of drugs that will keep them out of hospitals, probably save us money in the long run if we can control the outrageous profits that the drug companies are making today by holding them up when they can't afford their pharmaceutical benefits and charging whatever the market will bear. So you're right, your piece was right. We would like to spend more money to protect the seniors and give them a decent drug benefit. MARGARET WARNER: All right. Let me get Congressman Thomas to respond to that. Could the United States afford to spend more money, and does it need to? Or can you really... REP. BILL THOMAS: First of all, we need to put a senior prescription drug program in place. The Republicans, the majority, working with responsible Democrats, have moved legislation to the floor. REP. PETE STARK: That's two Democrats. REP. BILL THOMAS: The Democrats, who were in charge for years, never did it. The program we're offering is under what they call Title 18. REP. PETE STARK: I beg your pardon… MARGARET WARNER: I'm sorry, Congressman Stark, please don't interrupt. Let him finish and I'll get back to you. REP. BILL THOMAS: Thank you, Margaret. It is under Medicare, afternoon it is an entitlement. They don't like that, but it is. Here is the concern: Yes, we need to put a program in place, but two-thirds of seniors get their prescription drugs from other sources. You don't want to create a government program that's so rich that they leave the program they have and now we have a larger public cost than we would have had otherwise. He said the federal government. It's not the federal government's money, it's the taxpayer's money, and what we have to do is always build a balanced plan. Yes, the seniors need the prescription drugs, but the people who will be paying the bill are their sons and daughters. What we have to build is a balanced program. What the President has done is that he's afraid that this bipartisan plan will actually pass. And he's begun to throw money at the problem. You heard the expert. You get over utilization. You'll get an enormous expanse of costs. We should pay to take care of seniors but it should be a prudent plan in balance with the entire society. Seniors need it, but the young people are going to have to pay for it, and it should be balanced. MARGARET WARNER: We have just about 30 seconds, Congressman Stark, give us a prediction. Will there be a bill this year? Is there some way to compromise here? REP. PETE STARK: There will not be a bill unless the Republicans step up to the bar and do what's right. They have shown no indication to do that. They've been stalling us on managed care patient protection. They've been stalling us on every bit of good legislation. All they want to do is have a fluffy name and something that was written by the drug lobbyists. You won't see a decent benefit this year because of the Republicans. MARGARET WARNER: Congressman Thomas, will we see a bill? REP. BILL THOMAS: Tomorrow the House of Representatives will pass a prescription drug bill by a bipartisan vote. It will go to the Senate, and we will have done our job. If the Democrats would join with us, get rid of the partisanship, work together in a bipartisan way, the seniors will have the drugs they deserve. I'm pleased to say this bill will pass the House with a bipartisan vote. MARGARET WARNER: All right. Thank you both very much. REP. PETE STARK: Thank you.