Charts:  What Seniors Would Pay For The Standard Drug Benefit In The House And Senate Medicare Bills
8/20/2003

The attached charts illustrate the tough decision seniors would be forced to make under the stand-alone drug coverage option created in the House and Senate Medicare bills.

At this point, the drug benefit is one of the least controversial parts of the bill, and its design seems like a foregone conclusion.  House and Senate negotiators preparing the Medicare bill for final passage are bracing for more contentious topics, such as how much Medicare should depend on private health plans.

However, Congress should back up and reconsider the central issue -- whether or not the drug benefit makes sense.  The following graphics display what seniors would pay depending on their level of drug spending, based on the standard benefits package specified in the House bill (H.R. 1) and Senate bill (S.1). 








Some seniors with low drug spending will not want to purchase this sort of drug benefit.  However, they may feel compelled to enroll because both the House and Senate bills would impose late-enrollment penalties on those who do not purchase the benefit at their first opportunity.  Others may feel compelled to purchase the benefit because they (rightly) fear their ex-employers will use the new government benefit as a reason to drop retiree drug coverage.

Either way, the design of these benefits illustrates a recurring problem in health policy:  reasonable sounding political compromises that might not be workable or popular in practice.  Medicare conferees should consider simplifying the drug benefit to a zero-premium catastrophic plan or switching to a defined contribution toward drug coverage.

Link:
CentristPolicyNetwork.Org 2003 Medicare and Prescription Drug Resource Page