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Health Care Reform:

Health Insurance & Affordable Care Act

Washington Action Expected to Cover Drugs for Seniors

Health Policy Pulse

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The Medicare population will nearly double in the next 30 years, to 77 million beneficiaries, while the program's spending will skyrocket as a proportion of the nation's gross domestic product.

But right now, all that seems very far away. Medicare's financial stability is at an all-time high, measured by the statistic that the program isn't projected to go broke until 2024.

Moreover, Medicare's baby steps toward the free market have been more like stumbles. Robert Berenson, MD, who ran the Medicare+Choice program of HMOs for President Clinton, says that HMO enrollment has fallen significantly.

As of January, according to Berenson, Medicare+Choice enrollment was just 14% of seniors, off from its peak of 16% in December 1999. Some 934,000 seniors lost their HMO this January, as plans exited the market, complaining that their costs had risen faster than the government's contribution.

Meanwhile, most of the talk in Washington these days centers on Bush's upcoming tax cut proposal. An expensive proposal that will use much of the federal surplus, it has garnered some Democratic enthusiasm and may include provisions to help the nation's 43 million individuals who lack health insurance.

According to Bush health adviser and Medicare Payment Advisory Commission Chairman Gail Wilensky, PhD, refundable tax credits for lower-income families to purchase private insurance will be included in the Bush plan. If he proposes the tax credit as he did during the presidential campaign, she said, it would cost the government in the neighborhood of $7 billion per year.

But Reischauer says a health insurance tax credit is unlikely to happen, since there are too many contentious issues between the two parties on its policy details. Advocates for the uninsured, he says, "will find themselves disappointed."

Bush also has targeted final action on the managed care "patients' bill of rights," which Congress struggled unsuccessfully to pass last year. But pollsters Blendon and Celinda Lake note that the issue has diminished in its importance among voters.

Another possible front is allowing Americans to reimport cheaper drugs from Canada or Mexico. Last year, Congress passed a limited prescription reimportation, but Clinton's health secretary Donna Shalala -- unsure of its benefit -- subsequently decided not to implement it.

But both Rockefeller and Wilensky say that the reimportation bill is a "distraction" compared with other health actions that would make more of a difference. Says Rockefeller, "It lets politicians off too easily."

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