NCPA - National Center for Policy Analysis

Prescriptions For Drug Costs From Bush And Gore

September 13, 2000

There are similarities between the plans offered by Al Gore and George W. Bush to help the elderly pay for prescription drugs -- for instance, both offer free coverage to the poorest seniors and partial subsidies to those with somewhat higher incomes.

However, Gore would leave Medicare itself unchanged, while Bush would add new private insurance options. "I give him credit for putting the issue of overall Medicare reform on the table," says the Brookings Institution's Henry Aaron.

  • Under Bush's "Immediate Helping Hand" program, $48 billion would be distributed to states over the next four years to provide drug coverage for low-income seniors until permanent reforms were implemented.
  • All seniors would have the choice of new private insurance plans or the current Medicare program -- but every option would offer drug coverage and "stop-loss" protection for out-of-pocket health care expenses over $6,000 per year.
  • Those who sign up for prescription coverage would pay 75 percent of the premium cost plus copayments and deductibles, and the price tag is an estimated $158 billion over the next 10 years.

Robert Reischauer, president of the Urban Institute, commends Bush most for proposing a cap on all medical expenses. The limit plus drug coverage would nearly eliminate the need for medigap plans, says Reischauer.

  • By contrast, when the Gore plan is fully implemented, less-needy seniors would still pay over 60 percent of their drug costs up to $6,500 plus several hundred dollars in premiums.
  • Their annual out-of-pocket spending on prescriptions would be limited -- but not their total Medicare out-of-pocket costs.
  • The Gore plan would cost an estimated $253 billion in additional Medicare spending over the next 10 years -- although it would not be fully implemented until 2008.

Source: Jodie T. Allen, "Sweet charity could be a pretty bitter pill: Will voters swallow prescription drug plans?" U.S. News and World Report, September 18, 2000.


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