MEDICARE MANIA

March 1999
		How should the federal government reform Medicare before it becomes unaffordable? Answering your questions are Karen Davis, president of the Commonwealth Fund; Robert Reischauer, a senior fellow at the Brookings Institution; and Stuart Butler, vice president for domestic and economic policy studies at the Heritage Foundation.

The pros and cons of Sen. Breaux's plan. Should the age of eligibility be raised? Would prescription drugs be covered? Federal Employee Health Benefits and Medicare Predicting Medicare's future. Medicare and the budget surplus.     February 25, 1999: Reforming Medicare. The NewsHour's Health Spotlight. Browse the NewsHour's coverage of Medicare The National Bipartisan Commission on the Future of Medicare The Heritage Foundation The Commonwealth Fund supports health issue research The Brookings Institution.	Mark Adams of Neosho, MO asks: What about prescription drug coverage in Medicare Reform? Stuart Butler of the Heritage Foundation responds: Under the Breaux proposal, private plans would be encouraged to include outpatient drug coverage (as many Medicare managed care plans do today) and the government would pay most of the premium needed to pay for that benefit. So far, Breaux has not figured out how best to add a drug benefit to the traditional fee-for-service Medicare program, chiefly because the cost would be so large. Karen Davis of the Commonwealth Fund responds: · Prescription drugs are not included in the Chairman's proposal. Prescription drugs are an important expense to Medicare beneficiaries with serious chronic conditions. The Kaiser/Commonwealth survey of Medicare beneficiaries (Commonwealth Fund, December 1998) found that 11 percent of Medicare beneficiaries spend more than $100 per month on prescription drugs. · Medi-Gap plans covering prescription drugs (Plans H, I, J) are often unavailable to seniors with pre-existing conditions; those disabled under age 65 covered by Medicare are not guaranteed an ability to buy Medi-Gap coverage; even when coverage is available, premiums for Medi-Gap coverage with prescription drug benefits are beyond the reach of many Medicare beneficiaries with modest incomes · Better benefits including prescription drugs are a major reason Medicare beneficiaries enroll in managed care; adding prescription drugs to traditional Medicare would "level the playing field" and make choices a function of quality of care, not just to assure financial protection against major prescription drug expenses Robert Reischauer of the Brookings Institution responds: Out-patient prescription drugs are not covered under Medicare although many Medicare+Choice plans provide some limited coverage. Any reform of Medicare should expand the Medicare benefit package to include prescription drugs. Today, out-patient prescription drug therapies are every bit as important to medical treatment as X-rays, diagnostic tests, and surgery. Many drugs stabilize conditions that, if left untreated, can lead to expensive hospital stays or significant suffering. Lacking drug coverage, some elderly do not follow the treatment regimens called for by their physicians because they can not afford the medication. Prescription drug coverage can not be "voluntary" as it would be under the initial Breaux proposal. All Medicare participants must be covered to make the cost of coverage affordable. Participants should not balk at paying higher premiums for such drug coverage because the added premiums will reduce their out-of-pocket expenditures for drugs and the premiums that they or their former employers pay for supplementary policies.