Drug plans: a study in contrasts

Bush's new prescription-drug proposals rely most on market solutions. Gore's expand the federal role.

The basic ideological differences that divide the Republican and Democratic Parties are on full display in the different ways George W. Bush and Al Gore approach the issue of seniors and prescription drugs.

Drugs - and how to help Americans 65 and older afford skyrocketing pharmacy bills - have become arguably the hottest issue of this presidential election year. They are suddenly a pocketbook concern on the order of taxes, defense spending, or high college costs.

And for all Ralph Nader's rhetoric about the sameness of "Republicrats and Democans," the candidates' drug plans are far from interchangeable. The essence of Mr. Bush's plan, released Sept. 5, would be to help seniors buy private drug-insurance coverage. Mr. Gore would rely on the US government, adding drug benefits to Medicare.

"There really is a world's worth of difference between Vice President Gore's proposal and the plan articulated by Governor Bush," says Ron Pollack, executive director of Families USA, a healthcare advocacy group based in Washington.

The cost of medication has become an important political issue in the United States because it is the fastest-growing part of the nation's health bill. Two years ago, Americans spent $91 billion on prescription drugs. Eight years from now, that price is expected to balloon to $243 billion, according to the Kaiser Family Foundation.

This burden is falling disproportionately on the elderly, who account for one-third of all drug spending. One-third of those over 65 lack insurance coverage that helps them pay this cost.

For Democrat Gore, whose party's heritage has long reflected a belief that government has a large role to play in solving the nation's social problems, the answer is to expand Medicare. Poor Americans would receive completely free coverage, under Gore's proposals. Those with incomes of about $12,000 a year for an individual, or $14,000 a year for couples, would pay premiums for Medicare drug coverage, on a sliding scale.

Half the cost of prescriptions would be covered. No senior citizen, under Gore's plan, would pay more than $4,000 a year for drugs.

The cost of this coverage would be considerable: $253 billion over 10 years, according to the Gore campaign. But those who favor the Gore plan say it would provide a uniform benefit to everyone who is eligible.

"If you use the Medicare program you can truly guarantee ... that everyone will get coverage, which you can't do under [Bush's approach]," says Mr. Pollack.

The degree of government intervention inherent in Gore's plan, however, is anathema to Republican orthodoxy. Relying on Washington to direct a solution to this problem will simply create a new, costly, inflexible bureaucracy, in the GOP view.

If the government is directing pill purchase, it might limit the formulary, or available drugs, say Bush supporters. And the effect of a big program on drug prices and drug research is unpredictable.

"The Bush plan is better because it allows choice for seniors," says James Frogue, healthcare policy analyst at the Heritage Foundation here.

Bush announced his plan Sept. 5 in an appearance in Allentown, Pa. He billed it as one component in a "modernization" of Medicare, a program he called "too vital to be neglected."

The Bush plan calls for an immediate infusion of $48 billion to states over the next four years to cover all costs of prescription drugs for seniors earning up to $11,300 a year, and a part of the cost for those whose incomes are higher.

But its centerpiece would be a $110 billion, 10-year Medicare modernization. Among other things, this reorganization would require that all health-insurance plans that participate in Medicare provide a prescription-drug benefit.

For poor Americans, the cost of their premiums to join these plans would be fully covered. For more prosperous seniors, the government would pay 25 percent of the premium costs for drug coverage.

The downsides? Private insurers could simply pull out of Medicare, rather than agree to shoulder the unpredictable costs of drug coverage, say critics of Bush's plan. Furthermore, under Bush's plan, drug prices could continue to rise unchecked, say critics. There is a reason that drugmakers have disproportionately favored the Bush campaign with money this year, they say.

Gore's plan, by contrast, might be able to use the bargaining power of the federal government to reduce some drug costs, say its proponents.

In the end, how voters feel about either plan is likely to reflect their own beliefs about the proper role of government.

Bush's plan could benefit from a somewhat greater government role, says Jeff Lemieux, an economist at the Progressive Policy Institute in Washington. "But the Democratic plan probably needs more emphasis on diversity and different ways of doing things."

(c) Copyright 2000. The Christian Science Publishing Society