I'm going to commit heresy today by opposing an across-the-board Medicare prescription drug benefit for seniors. As a certified senior citizen, I think it's simply unfair to ask the taxpayers -- including our children and grandchildren -- to pay the full price of our increasingly expensive prescription drugs.
Later this year, both major political parties will be courting elderly voters by offering competing prescription drug plans. House Republicans last week announced they are drafting election-year legislation to include full federal drug subsidies for low-income seniors as well as protection against catastrophic medical expenses for all seniors. The House GOP bill carries a 10-year price tag of $350 billion in a program managed by private companies and supervised by Medicare. By comparison, President Bush has proposed a 10-year, $190 billion plan.
But the Democrats, recognizing the importance of senior voters this November, want more. "Unfortunately, for that amount of money you can't cover the people who need to be covered," said House Majority Leader Richard Gephardt, D-Mo. Gephardt and many of his fellow Democrats favor an all-inclusive prescription drug benefit administered through Medicare. I think they're offering free drugs for votes. No thanks!
I'm concerned about fairness. Why should seniors who can afford to buy their own prescription drugs be included in an across-the-board plan administered by Medicare? The net result of such a plan would be to saddle our children and grandchildren -- many of whom are struggling to make ends meet with young families -- with the exorbitant cost of free drugs for all seniors. Therefore, I support some sort of means testing for senior drug benefits.
Of course low-income seniors who cannot afford prescription drugs should be protected by any plan passed by Congress. But it's patently unfair to ask taxpayers to provide free drugs to Johnny Carson, Dick Clark and Bill Gates Sr. The Republican plan recognizes income disparities among seniors by suggesting a monthly premium of approximately $37 per month ($444 per year) and an annual deductible of $250 for most of the plan's beneficiaries, which seems reasonable.
About two-thirds of senior citizens already buy supplemental medical insurance that includes prescription drug benefits. In my own case, I purchase supplementary insurance that includes low-cost prescription drugs -- $15 for generics and $25 for brand name drugs. I wouldn't mind paying an extra $37 per month to Medicare for prescription drugs as long as my supplemental insurance premiums were reduced by the same amount.
Leading the charge for free drugs for seniors is the American Association of Retired Persons (AARP), whose executive director, Bill Novelli, has called the Republicans' $350 billion proposal "inadequate to fund what our members consider to be even a minimal benefit."
But how does he know that? I'm an AARP member and Novelli never asked me for my opinion. He and big-spending congressional Democrats want to allocate an additional $400 billion to the prescription drug plan from Medicare surpluses over the next 10 years, which could threaten the Medicare trust fund.
I agree with Novelli and AARP on one point: To be affordable and sustainable, Medicare prescription drug coverage must include strong measures to contain rising drug costs. According to AARP, drug prices are rising by about 17 percent per year and the average price of brand name drugs more than doubled in the past 10 years. The pharmaceutical industry itself is responsible for most of this increase by aggressively marketing drugs directly to doctors and consumers.
In 2000, drug companies spent nearly $16 billion on this type of advertising, and those costs were passed along to consumers. Drug industry advertising expenses in 2000 were more than three times what they were in 1996.
AARP recently compared the average retail price of a 30-day supply of a popular cholesterol-lowering drug, Lipitor (20 mg.), $103.60, with the price of the same drug through various public and private medical insurance programs. Monthly prices ranged from a low of $3 through the restricted TRICARE program for retired military and spouses to $86 under a pair of AARP programs. A monthly supply of Lipitor could be purchased in Canada for $56.
Here in Nevada, more than 1,400 elderly citizens have signed up for the Senior Rx Program, which covers seniors with incomes below $21,500 per year through a private medical insurance company. The state pays a $98 monthly insurance premium and the $100 annual deductible for those who qualify and drug co-pays range from $10 to $25 per prescription.
In a study of competing prescription drug plans last year, Business Week magazine concluded that "no one can agree on how big a benefit to offer, what the premiums should be or whether to tie a drug program to Medicare reform." The magazine noted that Medicare is expected to absorb nearly one-quarter of the federal budget and 4.3 percent of the gross domestic product -- nearly twice today's level -- within 25 years. "Add Social Security and the Medicaid health program for the poor, and every dollar of anticipated government funds will go to retirees," Business Week warned.
That's the dilemma Congress faces as it considers prescription drug benefits for seniors during an election year. Our elected representatives must decide whether to pander to elderly voters by offering us free prescription drugs to be paid for by future generations, or whether to scale-down such plans to conform with today's budget realities. Obviously, I favor the latter course of action, although many of my fellow seniors will disagree. Sorry about that!
Guy W. Farmer, a semi-retired journalist and former U.S. diplomat, resides in Carson City.