Conservative Health Scholars Urge "Fix" to Drug Benefit, Building on Discount Cards 
Jeff Lemieux
Originally published March 26, 2004; Revised April 1, 2004 to fix typing error. 

The conservative Heritage Foundation and Galen Institute separately published new reports yesterday arguing that the Medicare drug discount card program should be made permanent, with the addition of a catastrophic drug benefit.  Centrists.Org and the center-left Progressive Policy Institute (PPI) have encouraged this approach since early 2003.  The PPI plan was embraced by many moderate Democrats in the House, led by Reps. Cal Dooley, Ron Kind, Jim Davis, Charlie Stenholm, Rahm Emanuel, and Harold Ford.  Likewise, an eclectic group of Republican Senators and House members -- ranging from moderates to ultra-conservatives -- expressed interest in the discount card-catastrophic approach last year.  It makes even more sense now, given the controversy over the drug benefit's cost.

Here are excerpts from the new reports:

Grace Marie Turner and Joe Antos
FIXING THE NEW MEDICARE LAW:  HOW TO BUILD ON THE DRUG DISCOUNT CARD
March 25, 2004 

EXECUTIVE SUMMARY

Starting this June, seniors will begin to see the first tangible benefits of the new Medicare law. Medicare beneficiaries will be able to start using new Medicare-approved prescription drug discount cards that are expected to produce discounts of up to 25 percent. Additionally, subsidies of $600 a year will be available to low-income seniors to help with their drug purchases.

The Medicare Prescription Drug Discount Card and Transitional Assistance Program already has sparked intense interest among companies seeking to participate: As of the January 30, 2004 deadline, the Bush administration had received 104 applications from prospective card sponsors.

Medicare beneficiaries will be able to enroll beginning in May, 2004, and can start using the cards and subsidies in June. The administration expects more than seven million seniors to participate.

This is a temporary program, however, that is designed to provide interim help until the full drug benefit program begins in 2006. The early interest in this program and its rational structure suggest that it could provide a basis for a permanent program involving privately-negotiated drug discounts and fixed subsidies for the purchase of routine medications, with an added benefit of protection against catastrophic drug expenses....


Robert Moffit and Brian Reidl
MEDICARE'S DEEPENING FINANCIAL CRISIS: THE HIGH PRICE OF FISCAL IRRESPONSIBILITY (Draft)
(March 25, 2004)

... 2.  Make the drug discount card program a permanent feature of Medicare. The Centers for Medicare and Medicaid Services staff is already processing applications from over 100 companies that want to offer the drug discount cards on a regional or national basis. The infrastructure for a potentially successful program is already being established. There is no good reason to shut down the entire operation and deprive seniors of a personal choice. Indeed, the drug discount card program, combined with catastrophic coverage and even richer subsidies to low-income seniors, could be the foundation of a superior drug option for Medicare beneficiaries.  Federal subsidies to low-income seniors, or those without drug coverage, could be delivered through debit cards issued by private health plans...


Links:
Galen Institute Fixing the New Medicare Law: How to Build on the Drug Discount Card by Grace-Marie Turner and Joe Antos (March 25, 2004)

Centrists.Org CBO vs. The Bush Administration on Medicare -- A Difference of Opinion, Not a "Raised" Estimate (March 23, 2004)

Centrist Policy Network Medicare Follow-Up?  (January 4, 2004)

Centrist Policy Network Drug Benefits and the Emperor's Clothes (October 25, 2003)

Centrists.Org A Better Drug Benefit From The Hill, October 1, 2003 (www.thehill.com)

Centrist Policy Network Passing the Feasibility Test:  A Low-Income and Catastrophic Medicare Drug Benefit (September 24, 2003) 

Centrist Policy Network An Exit Strategy for the Medicare Conferees (September 11, 2003)