Clinton to seek coverage for drugs

A. ROSENBLATT

WASHINGTON -- President Clinton plans to propose next week that the government pick up part of the cost of prescription drugs for elderly Medicare beneficiaries who agree to pay an additional premium of up to $45 a month, knowledgeable sources said Friday.

The exact size and shape of the complex package is still being worked out as the administration tries to keep the cost to a minimum while satisfying congressional Democrats who want to assure a generous new benefit. Republicans, recognizing that the prescription drug benefit could be a winner in next year's election campaign, also want the benefit as part of a reformed Medicare program. As a result, said a top Senate Democratic health staffer, there is an excellent chance that Congress will enact something this year. "The Republicans are desperate for a tax cut, and we want the drug benefit," the staffer said. "So we give you a tax cut and you give us a drug benefit, and it will be in one big bill in the fall." Key Republicans welcomed Clinton's proposal. "I give the president high marks and am pleased he is going to offer a program," said Rep. Bill Thomas, R-Calif., head of the House Ways and Means health subcommittee. "Republicans believe prescription drugs are an essential part of Medicare." Although the new benefit will be costly, "I don't really think there's any alternative here," the president told a news conference Friday. "You've got 15 million Americans, seniors out there, without any kind of coverage for their medicine." Medicare now pays only for drugs used in the hospital and for some very costly drugs people take after transplant operations. About two-thirds of Medicare beneficiaries have coverage for prescription drugs through different sources, including former employers, supplemental Medi-gap insurance coverage, health maintenance organizations, and federal and state aid programs for the poor. For those who are covered, the costs and extent of the benefit vary widely. On Tuesday, the president intends to propose a new standard benefit as an addition to Medicare. It would be financed by a monthly premium in addition to the $45.50 a month beneficiaries now pay for Medicare Part B, which helps pay for doctor bills. The chief concern for the administration is how to design a drug benefit that helps the majority of elderly people without breaking the bank. The final numbers are still in flux, but interviews with a number of people who have been briefed on parts of the plan yield a picture of what Clinton is likely to propose. Covering even a part of the cost of prescription drugs would add billions annually to the cost of the already expensive Medicare program. Drugs are vastly more important as a medical tool than when the Medicare program began in 1965. They help keep people out of the hospital, often with costly prescription medicines that can help them avoid surgery. They alleviate pain and discomfort for those with chronic ailments. The average person on Medicare, which covers those over 65 and the disabled of all ages, fills 18 prescriptions a year at a cost of $942. Half of people enrolled in Medicare spend $200 a year or less, but more than a million have expenses greater than $2,000 a year. Under consideration by the administration is a plan to offer drug coverage to the elderly who pay an additional premium. Estimates of its cost range from about $35 to $45 per month. That is far less than the current cost of a Medi-gap supplemental insurance policy that covers prescription drugs. The policies, which also cover patients' share of hospital and doctor costs, run as high as $150 a month. In addition to the monthly premium, Medicare beneficiaries would have to pay one-quarter to one-half of the cost of each prescription, sources indicated. The total value of the benefit would be capped, probably at a level of approximately $3,000 a year. The administration is under heavy pressure from liberals in Congress to remove the limit and provide additional protection for people with extraordinarily high costs. However, there would be no deductible, meaning that the insurance coverage would start immediately with the first prescription used each year. "The administration is trying very hard to make this really attractive to people and really help them with drug costs, but that means it's not cheap," said one high-ranking staffer. Some groups that represent the elderly, such as the American Association of Retired Persons and the National Council of Senior Citizens, say they worry that the premiums the elderly would be asked to pay for the drug benefit would be too high. But experts say the suggested premium is far lower than the amount many people currently pay for their coverage. And the amount of coverage often is limited to several hundred dollars a year. "Within three to four years, drug spending will be such a burden that the elderly are going to find it a huge hit on their pocketbook," said Uwe Reinhardt, a professor of health economics at Princeton University. "Those who don't have health insurance already will break under that burden, and the groups that represent the elderly ought to educate members that the president's plan is in their own interest," Reinhardt said. "This is the last time to get on that train."

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