HEALTH CARE IMPROVEMENTS
April 12, 2002 - WAR REPORT NUMBER 15-2002
Like Social Security, Medicare is now the third rail of politics - - touch it and you die. Consequently, what is the forecast for a prescription drug benefit for Medicare this year? Not good. Why? Read on.

While most matters dealing with health issues are and have been, on the agenda for the democrats, the GOP and, more precisely, The White House, have been preempting the democrats on many of their sacred issues. For example, President Bush has proposed a prescription drug benefit for all Medicare beneficiaries. The President advocates an interim strategy to cover the lowest income people who don't drug coverage while Congress decides what the final benefit will be. This issue comes up in The White House 2003 budget for Medicare.

The President proposes $190 billion over 10 years for Medicare reform. This includes a prescription drug benefit and other changes. However, many politicians from both parties in Congress say that $300 billion will be needed for prescription drugs alone. Why? Because too little of this amount is reserved for low-income people. The GOP's proposal, on the other hand, provides that Medicare would pay 90 percent of the state's cost of expanding drug coverage for beneficiaries with incomes up to 150 percent of the federal poverty level (currently up to about $12,700 for individuals and $17,000 for couples).

I maintain that the GOP should increase the amount above and provide for a means of testing for all with Medicare who are paying up to 90 percent of the state's cost of expanding drug coverage for beneficiaries with incomes up to 300 percent of the federal poverty level. This should provide for a more politically acceptable buffer than the 150 percent referred to above. Most people and many politicians will agree that the government should provide for the poor. The ultimate question is, at what point do the beneficiaries kick in with the total purchase price of the drugs. In my opinion, the legislative forecast for this issue is that the House and Senate will probably pass separate bills, but they will not be able to reconcile their differences.

Stay tuned! Why? Because I tell it like it is and it's your money.

God Bless America.