long-
promised prescription drug benefit, the law contains a cornucopia of
non-drug related provisions, some of which are unrelated to
Medicare. It will bring significant added complexity to the Medicare
health care program that serves 40 million older and disabled
Americans.
Under
the new law, Medicare beneficiaries will be able to obtain some insurance
coverage for previously uncovered prescription drug costs. The drug
benefit will be optional and quite limited. Beginning in 2006, it
will be offered to all 40 million Medicare beneficiaries through
government-subsidized private plans. Due to premiums, deductibles, and
gaps in coverage, most seniors will have only a fraction of their
prescription expenses paid by the new benefit.
Despite
its name, there appears to be little "reform" or "modernization in
the legislation. Instead, the Act contains a "Santa's bag" of
benefits and handouts designed to obtain the support of various
congressmen, industries, geographic regions and interest groups for the
legislation.
The
numerous goodies are detailed in 681 pages of provisions weighing over 7
pounds. The cost is estimated by the Congressional Budget Office at
over 2 trillion dollars over the next two decades. But no one really
knows. What is clear is that the costs will be paid by increasing
deficit spending. Many commentators worry that such additional "unfunded
mandates" further threaten the already precarious fiscal integrity of
Medicare as well as the future financial security of most
Americans. Republican Senator McCain says Congress is
"spending like a drunken sailor" and further criticizes the bill for
its "incredible favors to the pharmaceutical companies."
The
Washington Post reports that over the next decade, the new law will steer
at least an additional $125 billion to the health care industry and
U.S.
businesses.
This includes an estimated $86 billion in payments and tax breaks to
employers who offer some prescription drug coverage to their
retirees. Hospitals, HMOs, physicians, ambulance services, and
other providers will also be paid more for treating elderly and disabled
Medicare recipients. Rural areas are particularly favored.
The
legislation is so complicated that its effects will only become clear over
many months and years. In future issues of this newsletter, I will be
providing you with my understanding of some of the more important
provisions and implications of the new
law.
The
text of the Medicare Prescription Drug, Improvement, and Modernization Act
is available on the Internet at http://waysandmeans.house.gov.
-Return
to the Medicare Act of 2003 Page-
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Marshall & Associates www.paelderlaw.com
