Push grows for drug coverage, Many back Medicare change
By Alex Pham, Globe Staff, 03/03/99
iriam Laserson has a costly drug problem. Her pharmacy bill adds up
to $646.78 a month. There are the brown pills for high blood
pressure, the diamond-shaped pills for her heart, the oval tablets for
cholesterol, and the pink capsules for allergies.
Although the 72-year-old grandmother is covered by Medicare, the
program has never paid a dime for her drugs, or anyone else's, since
Medicare began in 1965.
Six months ago, the prospect of Medicare covering prescription drugs
would have drawn guffaws in budget-minded Washington. But today,
Democrats and Republicans of all stripes are declaring allegiance to better
drug coverage for the nation's 39 million elderly and disabled. While the
discussion may amount to nothing more than Washington bluster, observers
of health care policy are noting a significant shift in the political winds.
''It's no longer as far-fetched as it was last year,'' said Gail Wilensky, who
ran Medicare in the early 1990s and is now chairwoman of the Medicare
Payment Advisory Commission, which advises Congress about Medicare.
''The pie has come down from the sky.''
What's changed? Federal coffers are now flush with surplus, an avalanche
of costly blockbuster drugs has triggered fierce public debate about how to
pay for medication, and a generation of baby boomers is heading toward
Medicare eligibility. Add a blue-ribbon panel charged with reforming
Medicare, and prescription drugs becomes an irresistible subject.
When Medicare was created, people suffering from arthritis had two
places to turn for relief: aspirin and Tylenol. Today, the arsenal is
considerably more extensive, but also more costly.
The most recent addition is Pfizer Inc.'s Celebrex. The drug has few side
effects compared with other anti-inflammatories, including aspirin and
ibuprofen, both of which can cause stomach bleeding. But the price is high.
A month's supply of Celebrex can cost more than $100, whereas a bottle
of 100 aspirin tablets is only $1.59 at CVS Pharmacy.
Celebrex is just one example of the dilemma. Drugs today advance quality
of life as never before, vanquishing everything from depression and
migraine headaches to impotence and ulcers. Heart medications allow
people to live longer, but like many drugs today, they must be taken every
day, helping to drive up the nation's drug bill.
US spending on drugs nearly doubled between 1993 and 1998, to $104.8
billion from $54.3 billion, according to IMS Health Inc., an industry
research firm. That spending is expected to surge further as baby boomers
hit old age and the biotechnology revolution spawns blockbuster therapies.
Policymakers and demographers have long predicted the crisis and urged
lawmakers to add drugs to Medicare's core package of benefits, to no
avail. At least until now.
''It's become very politically profitable,'' to advocate drug coverage, said
Uwe Reinhardt, a professor of health economics at Princeton University's
Woodrow Wilson School of Public and International Affairs.
In Massachusetts, the issue exploded last year when health maintenance
organizations announced they would no longer offer unlimited prescription
coverage for seniors, despite a state law mandating such benefits for the
elderly. HMOs challenged the law in federal court and won, leaving
thousands of seniors vulnerable to large expenses.
The furor caught the attention of many politicians, including Senator
Edward M. Kennedy and Representatives James McGovern and Barney
Frank. Kennedy is set to introduce a bill this month that will propose a
$1,500 annual drug benefit for every senior and disabled person on
Medicare with a 20 percent copayment and a $100 annual deductible.
McGovern, a Worcester Democrat, and Frank, Democrat of Newton, this
week introduced similar legislation.
Kennedy, who has tried to obtain drug coverage for seniors since 1970,
said the current mood in Washington represents one of the best
opportunities ever to gain the coverage. ''Now is really the time to address
this issue,'' said the Massachusetts Democrat.
The federal budget surplus has opened the door for additional spending in
the $210-billion-a-year Medicare program. The addition of drug coverage,
which could exceed $20 billion a year according to some estimates, would
have been unthinkable prior to the surplus. Indeed, President Clinton
advocated Medicare coverage of prescription drugs - funded by the
budget surplus - in his State of the Union address in January.
The catalyst for much of the discussion in Washington has been a
blue-ribbon commission charged with recommending to Congress
sweeping reforms of Medicare.
''Prescription drugs are one of the most, if not the most, important
component of quality care in our senior population,'' said Senator Bill Frist,
a Republican from Tennessee and a commission member. ''The
armamentarium of health care for seniors must include drugs. That's just so
fundamental.''
The argument on the panel isn't over whether Medicare should include drug
coverage, but how. Democrats on the commission say drugs should be
added to Medicare's core benefits so that every senior would have access
to drug coverage. Republicans say that would be too expensive for a
program already in deep financial trouble.
They also point out that 65 percent of Medicare beneficiaries already have
some sort of drug coverage, from former employers, HMOs, so-called
''medigap'' supplemental insurance policies purchased by seniors, or
Medicaid, the government health care program for the poor.
''Since we can't afford to take care of everybody, I want to make sure that
we take care of the 35 percent of the population that don't already have
coverage,'' Frist said.
Conservatives on the commission, including the co-chairmen, Senator John
Breaux, Democrat of Louisiana, and Representative Bill Thomas,
Republican of California, are backing a plan to force all medigap plans to
cover drugs and to increase eligibility for Medicaid, which does pay for
drugs, from 100 percent of the federal poverty guideline to 135 percent.
But the proposal has been rejected by two commission members who
represent swing votes in the panel's efforts to issue a consensus report.
''I have said from day one what an adequate drug plan looks like, and this
is not it,'' said Stuart Altman, one of the swing voters and a professor of
health policy at Brandeis University. ''Drugs have to be available to
everyone.''
Altman and others argue that many employers are scaling back health
benefits to retired workers. In addition, much of the coverage seniors
currently receive is expensive and inadequate. Even Medicaid, considered
generous, has gaps.
Myrtle Jackson, a 76-year-old great-grandmother in Lynn, gets Medicaid,
which helps pay for part of her $4,200 annual pharmacy bill. In 1997,
Jackson paid $1,800 of the bill herself because she earned slightly more
than the income ceiling for Medicaid. Last year, she paid $1,000 toward
her drug bill before Medicaid began picking up the tab.
Meanwhile, the topic has become so hot in Washington that even the drug
industry has ceded ground. In a major policy shift, the Pharmaceutical
Research and Manufacturers of America in Washington last month said it
supports prescription drug coverage under Medicare but only for seniors
enrolled in private health plans, such as Medicare HMOs. The industry
continues to fiercely oppose coverage under the government-controlled
portion of Medicare because it fears federal price controls.
To be sure, Washington may take no action this year, or even next year.
But some Washington skeptics are beginning to say drug coverage under
Medicare is inevitable.
''There's a large gap between talk and action in Washington,'' said
Wilensky. ''I don't think anything is going to happen in the short run. Not
now. But sometime.''
This story ran on page A01 of the Boston Globe on 03/03/99.
© Copyright 1999 Globe Newspaper Company.
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