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High cost of drugs potent in politics; Democrats see Medicare as way to cut into GOP majority in Congress


WASHINGTON -- Donald Soule, a 70-year-old retired electrical engineer from Lutherville, takes six medications for acid reflux and clogged arteries. His 75-year-old wife, Catherine Soule, takes three prescription drugs. Their bill: $11,000 a year.

"It's taking most of my discretionary income," says Donald Soule.

Not one cent of those costs is covered by Medicare, the government program that guarantees health care for 39 million elderly and disabled Americans. And the Soules don't get anything from his longtime employer, who dropped medical coverage for retirees on the day Soule retired four years ago.

Shelling out ever higher amounts of money for drugs, millions of older Americans, many worse off than the Soules, are seeing red, while many Democrats are seeing campaign gold in the retirees' dilemma and are pressing the issue with a new-found vigor.

Republicans, wary of the substantial cost of a prescription program, are nevertheless beginning to move tentatively on the issue, confronted by their own polling that shows Medicare drug coverage to be a potent political issue.

As health care has tilted toward drug regimens and away from extended hospital stays, lawmakers on both sides of the aisle have been deluged with complaints from the elderly about the cost of their medication.

"Every meeting I have with seniors, it is the No. 1 issue I hear about," says Rep. Benjamin L. Cardin, a Baltimore-area Democrat.

Earlier this month, Cardin introduced legislation to compel Medicare to pay most of the costs for prescription drugs that treat five conditions and diseases common to the elderly: diabetes, depression, heart disease, hypertension and rheumatoid arthritis.

Sen. Edward M. Kennedy, a Massachusetts Democrat, and Rep. Pete Stark, a California Democrat, have gone further, calling for significant drug coverage for all Medicare recipients. Under their plan, the government would pay most of the first $1,700 spent on drugs, and the individual would pay the next $1,300. After that, the government would pay all additional drug costs.

President Clinton called for Medicare coverage of prescription drugs in his State of the Union address five months ago, but he has not yet announced a specific proposal. A senior adviser says Clinton is leaning toward a less expansive bill than Kennedy's measure.

Cost estimates vary

Budget analysts on Capitol Hill and at the White House have not calculated the cost of the Cardin and Kennedy-Stark bills. Estimates of the cost of prescription coverage for the different proposals vary widely, ranging from $8 billion to $44 billion a year.

Republicans, who control both houses of Congress, say drug coverage for Medicare recipients would cost far too much. While senior GOP officials have not publicly announced their stance, their deep skepticism is believed to make sweeping legislation unlikely anytime soon.

Nevertheless, the issue is a tough one to ignore.

Although U.S. senior citizens make up 12 percent of the population, they consume 35 percent of all prescription medications. A survey by the National Academy of Social Insurance found that more than 9 million Medicare recipients have out-of-pocket expenses for medication that exceed $500 annually; more than 1.3 million pay more than $2,000 a year for their prescriptions.

Republicans respond

In response, there are some stirrings on the Republican side.

"My seniors are often forced to choose between food and drugs," says Rep. Jo Ann Emerson, a Missouri Republican. "It's absolutely critical to find a means for them to afford prescription drugs. To me, it's a no-brainer."

Emerson offered an alternative based on free-market principles: She would overturn a law that bars domestic distributors from buying American-made drugs overseas, where they are sold for less than the prices the distributors pay in the United States.

Perhaps more important, California Rep. Bill Thomas, a force within the GOP on health care policy, has joined Louisiana Sen. John B. Breaux, a Democrat, to propose modest drug coverage.

The two lawmakers call for guaranteeing prescription drug benefits for lower-income retirees -- individuals whose income is less than roughly $10,600 and couples whose joint income is less than about $13,300. The poorest senior citizens, like all lowest-income Americans, already receive prescription drug coverage under Medicaid.

Many Democrats dismiss that proposal as too weak.

The Breaux-Thomas plan wouldn't help the Soules, whose modest retirement income is still well above the plan's limits. And, while the Soules haven't had to choose between food and drugs, their big prescription costs do make a difference.

They are forgoing their annual drive to New Hampshire and are finding other ways to cut corners. "I'm sandbagging a little on my medication, too," Donald Soule confides. "I'm not taking it as reliably as I should, to save money."

"Some help is needed on these prescription drugs," Soule says. "I'm taking some pretty high-tech drugs and they're able to cope with diseases they wouldn't have been able to 10 or 15 years ago. But the costs of these drugs are awfully high."

Congressional control

For the Democrats, the Soules' predicament offers an opportunity to appeal not only to the potent senior voting bloc but also to voters in general as the party tries to retake control of Congress next year.

A poll commissioned by the Republican National Committee in April showed the potency of the issue. It found that 70 percent of 800 randomly selected registered voters said they would vote for a Democrat who favored a prescription drug benefit; just 24 percent would vote for a Republican who did not approve of the proposal because it was too costly.

Republicans have a meager six-vote majority in the 435-member House, and Democrats intend to make a strong bid to recapture it in 2000. Outright opposition by Republicans to the Medicare drug benefit proposals, the Republicans' pollster concluded, "could be a political disaster."

Democrats note that the federal Health Care Financing Administration, which oversees Medicare, could force major discounts from manufacturers if the program were to offer a drug benefit.

That's the wrong way to expand Medicare coverage, officials in the pharmaceutical industry assert.

"We want to avoid that at all costs," says Jeff Trewhitt, a spokesman for Pharmaceutical Manufacturers and Research, an industry trade group. "We really believe the price of health care should be determined through the marketplace."

But the industry strongly opposes Emerson's bill, too. Once American-made medications leave U.S. borders, Trewhitt says, they are no longer subject to regulation by the Food and Drug Administration.

"This legislation has the potential to harm millions of patients. Patients could not be assured medicines had been properly stored and transported," Trewhitt says. "The goal we have is to get more affordable medicine to senior citizens. There's a right way to do it and a wrong way to do it."

Role for HMOs

Deep cuts in profits could threaten the run of innovation spawned by the drug manufacturers' research, about $24 billion annually, Trewhitt says. Instead, Trewhitt argues for an expansion of the HMO component of Medicare, which pays much of the prescription drug costs for about 15 percent of retirees.

The Soules had obtained partial prescription coverage through an HMO whose premiums were paid by Medicare. But, citing costs, that firm -- along with several other HMOs -- pulled out of Medicare coverage in Maryland at the end of last year. Many HMOs have pulled out of the program in other states, too.

Some retirees purchase private policies to supplement Medicare, but those plans often grant only limited medication coverage. The Breaux-Thomas proposal would require all such supplemental policies to include drug coverage.

As senior citizens wield significant influence in electoral politics, the pharmaceutical industry has not been sitting idly by.

The six top drug manufacturers spent nearly $25 million in lobbying on drug-related issues last year and contributed more than $4.4 million toward last fall's congressional elections -- donations heavily weighted toward Republican candidates and party committees.

Overhaul is needed

Some advocates of creating a benefit for medication say the reform will be nearly impossible to achieve without a fundamental overhaul of the 34-year-old Medicare program.

"What we provide through Medicare is not regarded by the vast majority of beneficiaries as adequate," said Robert D. Reischauer, former director of the Congressional Budget Office. "But it will be very difficult, if not impossible, simply to expand Medicare benefits to include prescription drugs."

The Medicare program will be triply burdened in years to come by the growing cost of health care, the longer life span of Americans and the swollen ranks of the baby boomers, many of whom are nearing retirement.

A bipartisan commission charged with crafting a Medicare reform plan declined early this year to support a proposal by Breaux and Thomas, its co-chairmen, because it lacked prescription drug coverage. The refusal of Clinton-appointed commission members to back the plan doomed it.

The Democrats' unyielding stance on prescription drugs suggests they have found an issue they like.

Republicans "think the public is going to focus on tax breaks," said Rep. Jim McDermott, a Washington Democrat who served on the Medicare commission. "The longer they think that, the better, as far as I'm concerned. I hope they run off the cliff with that one."

Pub Date: 5/30/99

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