Bush Outlines New Approach to Medicare Reform

Published August 1, 2001

President George W. Bush took a first step toward a new conversation on Medicare reform, listing eight reform principles before an audience of about 200 people from the health sector on a beautiful summer day in the Rose Garden.

The eight principles are supportive of the premium support model of Medicare reform developed by Sens. Breaux and Frist and Chairman Bill Thomas, all three of whom had front-row seats in the Rose Garden. The President’s talk was refreshing for what he didn’t say—no demagoguery of the drug industry, no calls for price controls, no stories of people eating cat food to pay drug bills. He talked about the value of medical innovation and the need for Medicare to keep up.

Bush also backed a drug discount card program for seniors. But instead of focusing on the need for targeted subsidies to low-income seniors, as his original Immediate Helping Hand program would have done, he instead said Medicare would give a stamp of approval to private drug discount cards that meet certain criteria.

Not surprisingly, the second row of seats was occupied by John Rother and others from AARP, and Len Schaeffer of WellPoint, both of whom are already in line to offer discount cards. The White House is acting fast, requesting action on the proposal almost immediately.

Far from Ideal Reform

The drug discount card the President is proposing is a far cry from the bolder and more workable approach proposed by the Galen Institute and reviewed in detail in the July issue of Health Care News.

In that model, the drug card would be a vehicle to target subsidies to low-income seniors without drug coverage, and it ties the subsidy to participation in an insurance program for high-end coverage. The Galen plan would involve a number of potential competing players, including insurance companies, drug companies, financial intermediaries, disease management groups, retail drug chains, PBMS, state risk pools, etc.

The Senate Finance Committee is expected to mark-up a prescription drug bill the week of July 23, based upon adding a prescription drug benefit to existing Medicare, as put forth by Sen. Bob Graham (D-Florida). The approach is inconsistent with Bush’s principles to incorporate a drug benefit into a reformed Medicare, and he will likely oppose it.

Once the House takes a vote on a patients’ bill of rights, the focus of the health care debate will shift to prescription drugs.

Grace-Marie Arnett is president of The Galen Institute, http://www.galen.org.

For more information . . .

To read the latest version of the Galen Prescription Drug Security Card plan, go to http://www.galen.org/news/071001.html.