Letter From the Editor: Would Drug Legislation Abandon A Fundamental Principle of Medicare?

By Mary Johnson

Recent commentary on Medicare prescription drug legislation resembles the parable of the blind men and the elephant.  Each blind man, feeling a different part of the elephant, describes something completely different from the other men.  The blind man who has the trunk describes the elephant as long and limber.  The blind man feeling the elephant’s body describes it as being like a massive wall.  The blind man feeling the ear says the elephant is large and flat.  All describe the same beast, but none have “the big picture.” 

Medicare drug legislation is the same way.  It is elephantine—and for those of us struggling to describe it, commentary often draws vastly different conclusions.  For example, Congressman Mike Pence, whose article can be read at http://www.tscl.org/NewContent/101994.asp, argues that the prescription drug legislation creates a universal benefit that our nation simply can’t afford.  On the other hand, there are others like Robert D. Reischauer, a former director of the Congressional Budget Office and president of the Urban Institute, who argue that the legislation abandons the universal nature of Medicare.

Reischauer wrote, in an op-ed for The New York Times, that the principle of universality “ensures that all Medicare beneficiaries, no matter where they live or what their financial circumstances, are eligible for the same basic benefits.”  Reischauer says that the Senate drug bill denies the new drug benefit to about one in six Medicare beneficiaries who, because of their limited incomes, are also fully eligible for Medicaid.  Under current law Medicare pays first for these “dual eligibles,” while Medicaid picks up the difference.  Reischauer points out that the difference is more than a matter of who pays the pharmacist.  Because each state determines its own Medicaid drug benefit, he points out, the drug plan available to these dual eligibles would vary according to where they live.  Because states are cutting Medicaid benefits, Reischauer adds, those dual eligibles could wind up with skimpier drug coverage than other beneficiaries.  The House bill undermines universality as well, he says, but in a different way.  Under the House bill, seniors with incomes in excess of $60,000 would have to pay more out of pocket before catastrophic coverage would cover their drug costs.  Both bills would undermine universality, he says, by allowing considerable variation among private plans.  Plans could set different deductibles and require different cost-sharing rates for all or certain classes of drugs. 

TSCL is on record as supporting a universal drug benefit.  While it’s unnerving not to have “the big picture” to understand how legislation would change Medicare, failing to take any action to add prescription drug coverage because of that could be the far greater disaster.

Source:  “When More Means Less,” Robert Reischauer, The New York Times, July 16, 2003.

October 2003

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