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A Daily Chronicle of Bush Administration Distortion November 21, 2003
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Bush Supports Medicare Bill Despite Its Failure to Rein in Drug Costs



President Bush has promoted his Medicare reform by focusing on the importance of keeping costs down. "We must protect seniors from high medical costs that can rob them of their savings."1 Before leaving for Great Britain earlier this week, he met with Congressional leaders and warned them "to remember the promise we have made to America's seniors, and to vote yes for this legislation."2 But the 1,100 page bill supported by the president expressly states the Medicare administrator cannot "interfere in any way with negotiations . . . otherwise interfere with the competitive nature of coverage"3 of prescription drug costs, despite the success in other agencies of reducing costs by government-pooled purchasing.

Government involvement in negotiating lower prices has existed for years. For example, the Veterans' Administration negotiates drug prices on behalf of enrollees in their programs, a method which a 2000 National Academy of Sciences study found had achieved nearly $100 million in savings over the previous two years.4

The president also insisted that any bill enable seniors who have drug coverage from their former employers whould be able to retain that, saying last year, "more than half of our seniors have private drug coverage now because of their previous employment. And government should act to strengthen these private health insurance options, not replace them."5

But an analysis of the final bill by the Center for American Progress found that it would "discourage employers from continuing to offer prescription drug coverage to their retirees by providing less Medicare assistance to such retirees than to other beneficiaries," resulting in the possible elimination of coverage for two to three million retirees, more than half of whom have incomes below $30,000.6

Sources:
  1. Presidential Speech, 6/6/03.
  2. President Meeting with Congressional Leadership, 11/17/03.
  3. "61 percent of Medicare's New Prescription Drug Subsidy is Windfall Profit to Drug Makers," BU Health Reform Project, 10/31/03.
  4. "Some Successful Models Ignored As Congress Works on Drug Bill," New York Times, 9/4/03, p. A1.
  5. Presidential Speech, 7/11/02.
  6. "Medicare Legislation: Think Twice," Center for American Progress, 11/14/03.



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