Bush vs. Gore - At issue: Medicare drug coverage

Pharmaceutical Representative

As the November presidential election approaches, Republicans and Democrats are fighting over two different ways to reach the same goal: A Medicare prescription drug benefit.

Without a doubt, one of the most pyrotechnic issues of the coming presidential election is the addition of a Medicare prescription drug benefit. But, unlike other social issues, the Medicare prescription drug benefit issue is unique because all parties involved in the debate – Democrats, Republicans, and even the pharmaceutical industry – agree that America needs a prescription drug benefit. Where they disagree is on how to make it happen.

An issue emerges

When Medicare was established in 1965, little thought was given to the addition of a prescription drug benefit. "The legislation was driven by private insurance and private insurance didn't cover pharmaceuticals," said Edward Hughes, professor of health services management at Northwestern University's Kellogg Graduate School of Management. "The focus of Medicare was on hospital coverage – Part A. Part B was an afterthought."

Once the program was established without a prescription drug benefit, the idea of adding one and going against the status quo was next to impossible. But, according to Hughes, several reasons brought this issue to the fore in the late nineties. First, pharmaceutical breakthroughs have made drugs a first line therapy for many types of illnesses. The second reason is that prescription drug costs have risen over the last 10 years, a fact that ironically makes those therapeutic breakthroughs possible. Combine those reasons with a multibillion dollar budget surplus, and one can understand why the issue has gained momentum heading into the election.

The two mainstream candidates - Vice President Al Gore, a Democrat, and Texas Governor George W. Bush, a Republican - have said they agree with the need for a Medicare prescription drug benefit, but their approaches are vastly different.

"The danger in the healthcare debate is that America falls prey to the idea that the federal government should make all decisions for consumers, that the federal government should make all decisions for providers and the federal government should ration care," said Bush. He favors offering private sector plans for seniors and giving financial assistance to poor seniors to help them pay for the plans. "What our government must do is empower our seniors to be able to make choices for themselves and support premiums for the poorest of seniors."

Gore, however favors using the budget surplus to add a pharmaceutical benefit that would be available to everyone who qualifies for Medicare. "In this time of prosperity, it is unacceptable that so many seniors have to choose between medicine and food and rent," said Gore. "We must use our prosperity so that seniors never lack the medicines they need."

Though the Pharmaceutical Research and Manufacturers of America will not endorse a candidate, the lobbying organization does favor a private sector approach to a Medicare prescription drug benefit. "With the private sector approach, if you are a Medicare beneficiary, you go out into the private sector and you look at the wide array of plans they are offering, the new coverage programs, and you pick one and you do business with them, and you go into their plan and Medicare covers it," said Jeff Trewhitt, spokesman for PhRMA.

According to Trewhitt, PhRMA agrees with a private sector approach because, unlike a government program, which sets the prices the government is willing to pay for pharmaceuticals, a private sector plan allows pharmaceutical companies to negotiate prices that are fair for both the managed care companies and the industry.

Though Gore would pay for his $432 billion plan through the budget surplus, there is some concern over how Bush would finance his plan. "One of the issues the Democrats are raising is that they think Bush's tax cut may be too severe and might prevent the money from the surplus being available for the prescription benefit," said Hughes.

Of course, there are some in the healthcare industry who disagree with both candidates' plans. "If you're offering me a choice between Bush and Gore, I'd say it's none of the above," said Richard Coorsh, spokesman for the Health Insurance Association of America. "We came out a year ago with a proposal backed by our board of directors. It's a three-part proposal. Our proposal calls for block grants to states for drug purchasing assistance programs. It calls for tax credits to help people who have some wherewithal to pay the cost of prescription medications, and it also calls for equitable funding for equitable HMO coverage."

According to the HIAA, Bush's plan would still not provide adequate coverage for seniors. "We still have doubts as to the feasibility of such a plan covering the market," said Coorsh. "Any such plan would have to clear a number of very difficult hurdles, financial hurdles, regulatory hurdles, administrative hurdles, in order to be put on the market to begin with. Secondly, we have concerns that once on the market, assuming they ever got there, it would be difficult for these plans to price premiums at affordable levels for seniors."

As for the Gore plan, which adds the pharmaceutical benefit as an integral part of the Medicare program, Coorsh said, "We're not necessarily keen on adding another core benefit to the Medicare program. The program is in financial straits, and we think our proposal would put less wear and tear on Medicare."

November decision

The prescription drug benefit issue is not likely to be resolved by the presidential election, but the November vote will provide an opportunity for Americans to express what they want from the next president regarding their healthcare. "It's a case of two competing approaches to social progress," said Hughes. "One is a government-run program, where everyone must be treated the same, and the other is a marketplace approach that allows for more flexibility and more options. The goals are the same. The question is: What is the more socially optimal among the two? It's something the American people are going to have to decide. It will be interesting to see what happens, because this is a classic case of American social progress being fought out in the political arena." PR