Comparing Prescription Drug Proposals: Bush v. Gore
Table of Contents
Structure of the Two Approaches
"Under Bush, seniors would enroll in one health plan with one premium."
Under both the Gore and Bush proposals, when fully implemented, seniors living in poverty would pay nothing for prescription drug coverage. Low-income seniors above the poverty level would receive partial subsidies, and seniors with higher incomes would receive still smaller subsidies.
The Gore Proposal. Gore proposes to add a "Part D" for drugs to the existing Medicare program, beginning in 2003.2 Called "MediCoverage," the program would pay all premiums and copayments for low-income Medicare beneficiaries with incomes below 135 percent of the poverty level (currently $11,300 for individuals and $15,200 for couples). Seniors with incomes between 135 percent and 150 percent of poverty ($12,600 for individuals and $16,900 for couples)would receive a partial subsidy - the amount not yet specified.
"The Gore approach would add a prescription drug program to Medicare."
Beginning in 2003, seniors with incomes above 150 percent of the poverty level would pay a $25 per month ($300 per year) premium, which would rise gradually to $44 ($488 per year) in 2009. Initially, MediCoverage would pay half of a beneficiary's first $2,000 in drug costs, with total out-of-pocket costs capped at $4,000. By 2009, when the program is fully phased in, the benefit would cover half of the first $5,000 in drug costs. Total out-of-pocket costs would remain capped at $4,000.
The Bush Proposal. Bush proposes to ultimately integrate prescription drugs into comprehensive health care coverage and give seniors a choice of plans, including the traditional Medicare program. His proposal would not subsidize a universal drug benefit for all seniors. Rather, under the Bush proposal, the government would:
- Cover the full cost of comprehensive health coverage, including prescription drug coverage, for seniors with incomes at or below 135 percent of poverty.
- Subsidize part of the premium for seniors with incomes between 135 percent and 175 percent of poverty (currently $14,600 for individuals and $19,700 for couples).
- Pay at least 25 percent of the premium costs for prescription drug coverage for all seniors.
- Cover all out-of-pocket Medicare expenses - including drug expenses - in excess of $6,000 annually for all seniors.
"The Bush approach would integrate prescription drugs into comprehensive health care coverage."
As an interim step, while Medicare reform is being implemented, Bush has proposed giving $48 billion to the states to set up "Immediate Helping Hand" pharmaceutical benefit programs that would:
- Cover the full cost of prescription drugs for seniors with incomes at or below 135 percent of poverty.
- Cover some of the cost of prescription drugs for seniors with incomes between 135 percent and 175 percent of poverty.
- Cover any prescription drug costs in excess of $6,000 annually for all seniors.
As a study for the White House shows, there are about 11 million seniors without any prescription drug coverage, and more than 50 percent of them would be covered by Bush's short-term plan. [See Table I.] The remainder of those without coverage spend, on average, less than 4 percent of their income on drugs and often do not elect to purchase coverage through Medigap policies, existing state programs or HMO Medicare plans.
"Without coverage for drugs, seniors will turn to more expensive and less effective doctor and hospital therapies."
Under the Bush proposal, the average Medicare beneficiary would not pay more than 12 percent of the total premium amount for Part B and prescription drug coverage combined, whereas under current Medicare law beneficiaries' contributions are projected to rise to nearly 14 percent of the cost of Part B. The Gore proposal does little to ensure that seniors will see their premiums stay the same and, in fact, the drug benefit requires a premium on top of the existing Medicare premium.
