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| July 3, 1999 - written by Steve Freedkin, LIST.HEALTHPLAN
OFFICIAL ANNOUNCEMENT 3 P.M. EDT 06/29/1999 As President Clinton prepares to announce his proposal for Medicare coverage of prescription drugs later today, Tuesday, June 29, 1999, details are being reported in various news outlets. The following details have been reported: * The coverage would become available starting in year 2002. * Medicare would pay half the cost of prescription drugs, up to $2,000 worth of medicine in the first year, rising over six years to $5,000 worth of benefit. * The premium for drug coverage would be $24 per month
in the first year, rising to $44 over the following six years.
But the government would pay the premium for patients who * Patients will be allowed to choose whether to enroll in the drug coverage, called Medicare Part D, but will not be able to drop in and out of it. However, it is expected that "virtually all" Medicare recipients will opt for the plan, which will cost less than half the $90 average price of "Medigap" policies currently on the market. * Additional cost-saving measures will be proposed, including rules designed to further promote competition in the health-care industry. * Other cost-saving ideas, including charging higher
premiums to more-affluent recipients or increasing the age at which
coverage starts, were rejected as politically infeasible. * The President proposes to use 15% of the federal
budget surplus for the next 15 years, about $700-800 billion in
all, to help keep Medicare solvent. The President announced
on Monday, June 28, 1999, that he plans to give Medicare an extra
$94 billion from this year's larger-than-expected The San Jose Mercury News and the New York Times report that the President plans to use some of the surplus for Social Security as well as Medicare, while Republicans want more of it to go into tax cuts. Without help, Medicare is forecast to go broke by year 2015. Budgetary predictions have often been extremely inaccurate. The current prediction from the White House Office of Management and Budget is that there will be a $2.93 trillion surplus for the years 2000-2009, 20 percent more than predicted just five months ago. However, such predictions rely on unknowable assumptions about the state of the economy over that period. Many Republicans, and some members of the health-care
industry, argue that the government should help defray the cost of medicine
only for elderly patients who lack prescription drug coverage or But politicians of both parties have latched onto the idea of helping Medicare patients pay for drugs, an idea that enjoys wide public support. Currently, an estimated one-third to one-half of Americans 65 and older pay the entire cost of their medicine. Many of them find that burden particularly difficult because the typical older American relies on 18 prescriptions a year and because pharmaceuticals expenses represent the fastest-growing facet of U.S. health care costs. The prescription drug benefit is the centerpiece of a proposal the White House has been developing for months that is aimed at modernizing the 1960s-era Medicare system while trying to shore up the program to withstand the enormous economic burdens it will confront in slightly more than a decade, once the large baby boom generation begins to retire. Th White House's version would represent one of the largest expansions of Medicare's scope in the history of the program. Until now it has helped older Americans pay for their hospital bills, doctors' visits and other expenses such as medical equipment and home health care. The drug benefit would be run by an entirely separate new wing of the program, which would be known as "Part D." Certain details of Clinton's proposal still were being
hashed out over the weekend and even Monday, June 28, 1999, when the
White House received an official budget analysis of its proposal from
White House officials were so determined to try to keep details of its plan secret until today that they canceled their ritual of briefing key congressional staffers the night before announcing major policy initiatives. Even before the plan becomes public, it is attracting criticism. The health insurance industry warned yesterday that Clinton's approach would undermine elderly patients' interest in private HMOs, most of which offer drug benefits as an inducement. Meanwhile, Republicans on Capitol Hill contended that the plan might prompt employers to drop drug coverage from retirees' health benefits. New York Times report: Reuters News Service report: ABC News report, with Q&A on the new plan:
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