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Health Care
What's New? - Archive
WomenMatter will continuously post updates on all this and other issues as we monitor the continuing philosophical and practical debates nationwide. Please check back often for updates.
Past updates are available for reference on the Healthcare Archives page.
Prescription Progress: The Meanings of Drug Benefit Bills
Delayed Reaction - first the election of 2004. Then the medicine.
Since any drug benefit for seniors will not go into effect until 2006, most seniors will not realize the limitations of this legislation until after the election. So what’s the reason for all the excitement now? The big news is that the President that ran for election on privatizing Medicare has in June 2003 decided to support adding prescription medicines partly through the government agency – Medicare. But not in the way Medicare is structured now.
What happened to the Bush campaign plan about letting private insurance companies and private pharmacy managers make most of the decisions about whom to insure and what medicines and tests and services to cover? Are the Republicans changing philosophy to support the Democrats idea that seniors are entitled to medicines after a lifetime of working and paying taxes for medical care? If that is so, why are some Democrats voting to limit how much prescription help elderly people can receive? Didn’t Democrats say that health care is an entitlement not a privilege?
Popular idea and the rigid budget number
We have to remember that this whole debate about medicines is part of the big tax cut and budget bill that became law just recently. It is a ten year plan with different tax cuts and different services kicking in at different times. Both the House and the Senate have approved bills that provide $400 billion to subsidize prescription drugs for seniors beginning in 2006 as part of the ten year money plan.
This legislation is necessary because a large part of the voting population is already elderly or going to retire within the next fifteen years. The current Medicare system, created in 1965 when hospital expenses were the key concern, does not help seniors pay for their medicine and medicines, which are now the preferred way to treat the illnesses of the elderly. Medicines keep people from having to go to the hospital.
Popular ideas push political parties to support them - especially before an election. So both parties want to promote medicine for the elderly. And both have to deal with the available tax dollars, since the federal government is running a huge deficit from the military and security expenses and the tax cuts in a very weak economy.
Government trying to catch up to technology
The government has needed to catch up with medicine for a while now, and with some recent prodding from the current President Bush, Congress has taken a step toward a prescription drug plan for seniors. The issue has been tied up for at least six years now, because Republicans and Democrats haven’t been able to agree on just how to offer drug benefits to seniors.
Differences in Philosophy
Most folks with Medicare have worked all of their lives, contributing to the health of our society and economy. To what extent should our society contribute to their health?
Many feel that since we are all members of the same society, we should have a universal health care system, in which everyone’s healthcare costs are paid for by our tax dollars which are contributed by all of us who can and do earn money.
Others believe that medicines and healthcare are just like other goods and services, and should be determined by the market, or, privatized. In that case, people should shop for health care and buy the kind they can afford. People of different incomes will buy different amounts and kinds of health care according to their means – this is a means test.
A Partisan Issue - where the parties have taken their stand up to now
Republicans feel that if healthcare is made private, patients will receive better care. They say that if companies are allowed to compete for patients’ business, then to keep customers happy healthcare prices will go down and healthcare quality will go up. To Republicans, Medicare Reform often means that health care packages of services should be offered to people who can then choose what they want to receive within the range of what they want to or can pay. These plans are Preferred Provider Organizations (PPOs) in which the individual who pays more to the insurance company in return gets more choices of doctors and services.
What makes insurance work is sharing the risk of getting sick. So companies that promise to pay our bills when we get sick and old want as few sick and old people in the group or “pool" as possible. Insurers do not want government to set a standard that tells companies that they have to insure everyone in a geographical area or at any income or health level. However, even the sick and the poor have a vote and their representatives know that.
Democrats say that if healthcare is privatized, the poorest and sickest Americans are likely to get left behind, because no one will want them in the pool of insured individuals. Democrats say Preferred Provider Organizations may be too expensive for many seniors.
Comparative Politics 101
The Medicare reform bills passed by the House and Senate reflect Republican values, both take a step toward the privatization of Medicare. The vote reminds us that the political party that our representative belongs to does make a major difference. There are times when each representative has to follow the leadership of her/his party. When we hear someone say, “I vote for the person, not for the party" – let us remind them about the way the legislatures and the executive power of the president or a governor really work.
However, the bills in the House and the Senate differ in some important ways. They are all designed to stay within the $400 billion limit over ten years. They all start in 2006 and they are all based on guessing how good jobs will be so that there will be both incomes and tax dollars to pay for medicines.
The following are features of the House bill only:
- Requires wealthier seniors to spend more on drugs before getting catastrophic coverage.
- Requires Medicare to compete directly with PPOs beginning in 2010.
- Allows people to set up "health savings accounts" that would be tax-free.
- Completely covers an initial doctor’s appointment and blood lipid test and waives deductible for colorectal cancer screening.
These are features of the Senate bill only:
- Government will offer drug benefits to any region where only two or fewer PPOs are available. Senate Democrats insisted on this back up to the Republican system. There are many rural and urban areas where the low income sick and elderly live. In these areas, even now there are some where there are no insurers or only one – with no competition to keep the services up and the prices down.
- Requires wealthier seniors must pay more for premiums. The means test.
- Divides $12 billion between two partisan demonstration projects. The Republican project hopes to encourage competition among private plans by requiring them to make bids for payments. The Democratic project pays for preventive and chronic care services through traditional Medicare.
The two bills must be reconciled in committee before President Bush signs the Medicare reform bill into law. Since there are some major differences between the bills (namely the House bill’s "health savings accounts" and its requirement that Medicare compete with PPOs beginning in 2010), it may take awhile for Democrats, Republicans, House and Senate to agree.
What the final version is likely to include: an exercise in fitting the pieces into a $400 billion fixed price puzzle.
Both bills require seniors to pay a $420 per year premium and a deductible of somewhere between $250-$275.
Both have a coverage gap. This means that after seniors pay a certain amount (Senate: $4,500, House: $2,000), they have to pay all of their drug costs until catastrophic coverage kicks in (this happens in the Senate bill at $5800 and the House bill at $4,900).
The initial coverage, which affects most seniors, is similar in the two bills but not the same: In the Senate bill, insurance pays half of drug costs from $276 to $4,500. In the House bill, insurance pays 80% of drug costs from $251 to $2,000.
What this means in the real world
Right now, the bills have similar short-term outcomes. Here are some real-world results:
For a senior who has $5,000 in drug costs per year, the Senate bill would equal $3,307 paid out-of-pocket, and the House bill $3,500 paid out-of-pocket. Perhaps not the savings most seniors were hoping for.
For a senior who has $1500 in drug costs per year, the Senate bill would equal $1307.00 out-of-pocket, and the House bill would equal $920.00 out-of-pocket. Still not the savings many people want.
Stay tuned and stay healthy. WomenMatter will help us all pay attention to the details behind the promises. Check to see how your representative voted on Taking Action
Posted on: 7/3/2003
Update - Taking Your Temperature With Medicare
For a while now, “prescription drugs for seniors" has been a phrase in the news and on politician’s lips, and seniors are much closer than they have ever been to getting some kind of drug coverage through Medicare. Prescription drug bills have passed through both chambers of Congress, so what’s the hold up? Why hasn’t President Bush announced that the plan is in place for 2006? (The year drug coverage would start.)
For a bill to pass
At this point, the House and the Senate have passed similar, but distinct prescription drug bills. The two chambers must agree on a single bill before it goes to the President for his signature. 17 legislators (11 Republicans, 6 Democrats) make up a committee that hopes to iron out the differences and present a unified prescription drug plan to Bush.
The trouble is, the House and Senate bills are different from each other in some important ways, and it will take great compromise to weave together the various philosophies represented in each bill.
Low- income seniors
The Senate and House bills treat low-income seniors differently. The Senate bill gives bigger subsidies to seniors whose incomes are below the poverty level, paying virtually all drug costs. The House bill requires low-income seniors to pay for a substantial portion of their prescriptions.
However, the Senate bill also excludes all seniors on Medicaid. Medicaid is a joint federal and state program that has provided healthcare to low-income citizens since 1966. Since Medicaid provides prescription drugs in its program, the Senate bill excludes all Medicaid recipients from Medicare drug benefits.
Although cutting Medicaid recipients frees up funds, allowing greater coverage for all other seniors, critics argue that this bill violates the very principles of Medicare. Medicare is supposed to be for everybody, rich or poor, sick or healthy. If this bill cuts out a section of seniors (the poorest section), does that set a precedent? Will Medicare suddenly be for few and not for all? [For more on Medicare reform, click here]
The House bill includes all seniors in its prescription drug plan, but does not provide much help to low-income seniors. This bill has a greater gap in coverage and offers fewer subsidies.
The state of states
Most states are in favor of the House bill because it may ease their budget crises. All states offer prescription drug benefits for people on Medicaid, and the House bill offers those same individuals drug benefits through Medicare, so states can cut back and cut costs.
Many states are having budget problems these days, and one reason is rising healthcare costs for Medicaid recipients. States report that healthcare costs are rising by 15% annually, while state budgets are shrinking. So, states are lobbying Congress in favor of the House bill over the Senate bill.
Competition
The House bill forces Medicare to compete with private healthcare providers (PPOs) for seniors’ business. The philosophy behind this policy is that if Medicare has to compete, it will become more cost-effective. Democrats are against the privatization of Medicare, and feel that society (therefore, government) should provide healthcare for seniors and ensure that every senior receives the help that she or he needs.
The Senate bill does not require Medicare to compete with PPOs, so Democrats are more in favor of the Senate bill than the House bill, although many Democrats are dissatisfied with both bills.
Committee of compromise
The 16 man and one woman committee that is to reconcile the two bills has a difficult road ahead.
Democrats on the committee are very much opposed to the privatization of healthcare and believe that the House bill destroys Medicare.
Republicans on the committee think that the Senate bill does not do nearly enough to change Medicare and that the House bill’s provisions that force competition are essential.
Both sides agree that they probably won’t reach an agreement until September 2003. For many Democrats and some Republicans there is a serious question. Is it better to make a deal that gives more people drug coverage but runs counter to a basic philosophy that all people should get the same guarantees about health care? Or is it better not to pass a bill and take the philosophical difference between price competition and universal coverage to the public in the 2004 election?
To discuss this topic with other readers, click onto our online forum.
To contact your representatives and urge them to compromise in a way that you believe is right or not to compromise at all, click here.
Update Posted on: 7/29/2003
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