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Medicare Commission Punts After It Agrees Only to Disagree

MANAGED CARE April 1999. © MediMedia USA
News and Commentary

Medicare Commission Punts After It Agrees Only to Disagree

MANAGED CARE April 1999. ©1999 Stezzi Communications

Hindsight is 20/20, but was this predictable? After a year and a half of hard work, a blue-ribbon commission that set out to keep Medicare from running into a ditch itself slid off the road, thanks to deep

ideological divisions regarding government's role in health care. The commmission disbanded without a recommendation — consigning the political hot potato of Medicare to Congress and the presidential campaign.

The Bipartisan Commission on the Future of Medicare, led by Louisiana Sen. John Breaux, was hung up on two issues: quasi-privatization and prescription coverage. Breaux, fellow Democrat Bob Kerrey of Nebraska, and the commission's eight Republicans favored turning Medicare into a clone of the Federal Employee Health Benefit Program. Under FEHBP, federal workers choose health benefits under a defined-contribution system. Two of the seven members who did not come around to Breaux's way of thinking, Stuart Altman and Laura D'Andrea Tyson, agreed that while the idea had merit, it didn't do enough to find new revenue that would keep Medicare afloat when the baby boomers start hitting 65.

The prescription-drug issue was off the table until the last days, when Breaux made an unsuccessful attempt to woo the panel's Democrats, who favored coverage. Breaux's plan would have provided it for people with incomes of up to 135 percent of poverty.

The debate about Medicare and prescription drugs has spilled over into Congress; several bills proposing some form of coverage have been or soon will be introduced. Any and all are opposed by the pharmaceutical industry, which views the benefit of increased demand as more than offset by the threat of deep discounts or price controls. The administrator of the Health Care Financing Administration wants to include prescription coverage in Medicare.

Chip Kahn, president of the Health Insurance Association of America, said while Breaux's competition plan formed a "good framework" for reform, prescription mandates would hurt HMOs' ability to provide affordable coverage.