Clinton urges bipartisan effort on Medicare drug benefit

June 14, 2000
Web posted at: 5:04 PM EDT (2104 GMT)

WASHINGTON (CNN) -- President Bill Clinton and congressional Democrats on Wednesday challenged Republicans to join them in providing a "real" prescription drug benefit to the nation's seniors.

"All the leaders here today recognize that adding a voluntary prescription drug benefit is not just the right thing to do, medically speaking, it's the smart thing to do," Clinton said. "No one creating the Medicare program today would think of doing so without prescription drug coverage."

Joining him at the White House were Senate Minority Leader Tom Daschle (D-South Dakota), House Minority Leader Richard Gephardt (D-Missouri) and others.

"There really is no more important issue Congress should be working on this year, and in this time of unprecedented economic growth there is no reason why we shouldn't be," Daschle said.

Clinton said there was growing bipartisan support for prescription drug action this year, "and that's good.

"But the leaders and advocates here today are still concerned that the proposals the House Republicans are putting forward later this week will not ensure that all seniors have an affordable prescription drug option," Clinton added.

An acceptable plan, he explained, would include voluntary but universal access. Additionally, seniors would not have their access limited based on where they live -- such as rural areas where HMOs may not operate.

President Bill Clinton spoke Wednesday at the White House

The president's comments came just as House Republicans are pushing forward with Medicare prescription drug legislation that relies on managed care organizations and private insurers to sell government-subsidized prescription drug policies to Medicare participants.

"We have a fundamental difference" with Democrats, said Rep. Richard Burr (R-North Carolina) at a House Commerce subcommittee hearing on Wednesday. "It is the argument about whether the government controls this new benefit or whether we use the competition of the private sector."

House Republican leaders predict that committee action on GOP legislation could come as early as next week. While they have highlighted Democratic endorsements -- from Reps. Ralph Hall (D-Texas) and Collin Peterson (D-Minnesota) -- congressional Democrats on the whole remain critical.

"The proposal being rushed through by the House leadership does not seem to meet the needs of today's seniors," said Martha McStein, president of the National Committee to Preserve Social Security and Medicare.

	 MESSAGE BOARD
Politics of health care


Even some Republican lawmakers have raised concerns that their party is moving too fast and that several details remain to be worked out.

"It would be a tragedy to put a bill on the floor that most members don't understand what the implications will be," said Rep. Greg Ganske (R-Iowa).

The insurance industry also has some reservations about the GOP plan.

"The evidence suggests that it would be extremely difficult to ensure the universal availability of drug coverage to seniors through this type of proposal," said Chip Kahn, president of the Health Insurance Association of America, in testimony prepared for Wednesday's hearing.

"We have grave concerns because the Republican plan builds on the already flawed private Medigap insurance market," Clinton said in a reference to the supplemental plans offered by private insurers.

"As recently as yesterday, the insurance industry reiterated its belief that a Medigap insurance model simply will not work for prescription drug coverage -- the insurance industry itself has said this repeatedly -- and that private insurers will not willingly participate in such a program," he added.

But California GOP Rep. Bill Thomas, one of the Republican plan's architects, said Clinton's concerns were unfounded.

"We believe the private sector can do a great job," Thomas said. But "The government will be there if necessary," he said.

The GOP proposal is slated to be released Friday. Thomas said it would have several provisions designed to ensure that help with drug costs and would be available to all older Americans.

First, he said, the government would pay insurers 30 percent to 35 percent subsidies to ensure that new drug policies are affordable to all, not just retirees with the lowest incomes, whose drug insurance premiums would be paid for directly by Medicare under both the GOP and Clinton plans.

Thomas also said the government would act as the "insurer of last resort" if private plans failed to offer adequate coverage options everywhere across the country. Details of that fallback coverage are still being worked out, he said.

House Minority Leader Dick Gephardt joined the president at the White House

He estimated that with the help of government subsidies, an insurance company could offer a drug policy with monthly premiums of $35 to $40 and a $200-$250 annual deductible, with 50 percent copays and catastrophic protection covering out-of-pocket charges after $5,000 to $6,000 in annual spending.

"We have grave concerns, because the Republican plan relies on a trickle-down scheme that would provide a subsidy for insurers and not a single dollar of direct premium assistance for middle-class seniors," Clinton said Wednesday of the Thomas plan.

The administration's plan establishes a monthly premium starting at $26 for seniors who opted for the coverage, and includes no deductible and a 50 percent co-payment toward prescriptions. The maximum annual government reimbursement initially would be $1,000 and rise to $2,500.

Democrats have proposed including catastrophic coverage like the Republicans' plan, but it is unclear how much that would increase retirees' premiums or costs to the government under Clinton's plan.

So far, both sides estimate government costs of the new benefit at around $40 billion over five years.

The Associated Press contributed to this report.

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