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Prescription for Confusion

August 07, 2003

Republicans and Democrats alike are aware of how much the elderly want help with prescription drugs. Neither party wants to be blamed for blocking a deal that would fulfill a major campaign promise of President Bush. Unfortunately, both of the Medicare drug bills being hammered into a final proposal by House and Senate conferees would leave retirees feeling angry and cheated, while still sticking taxpayers with a huge bill.

Although Medicare's costs and benefits have risen with the overall explosion in medical costs and inventions, the system has dampened the rise by paying only for procedures that panels of physicians think are "medically necessary." The lines have sometimes been arbitrary, but they are more sensible than those drawn by HMO accountants. It will be even tougher to control prescription drug costs. The price spiral has put a drag on employers and patients as well as state and local governments, which help pay for drugs for Medicaid recipients.

Though both the House and Senate bills make token gestures toward moderating drug prices, they prohibit the federal government from bargaining with pharmaceutical companies to get good deals by using its huge clout. Such a cost-saving strategy is followed not only by governments such as Canada but also by the Bush administration itself; for instance, the administration negotiated an 80% cut in the price of the anti-anthrax drug Cipro in 2001 for government purchases.

The prescription drug bills as they currently stand are also incomprehensible. Both could create dozens of mind-bogglingly complex private plans under which even the best-educated consumers would be hard-pressed to make comparisons. How, for example, to compare Plan 1, which for a $40-a-month premium offers to pay 30% of the cost of a given drug but only for condition Y, with Plan 2, which for a $30-a-month premium pays 25% of the cost of the same drug but only for condition Z? The administration's separate plan for distributing privately administered drug-discount cards has the same flaw.

Congress can spare the nation from such perplexing choices by doing for drugs what Medicare already does for other types of medical care: require that all private plans in the program start by covering a barebones list of drug treatments that physicians deem medically necessary.

Free-market innovation can spur good medicine, but consumers don't really have freedom when the options they are offered don't make sense. That's not "choice"; it's a recipe for letting corporate flimflam artists game the system.

There is of course the question of whether any broad-based drug benefit is affordable in a time of huge tax cuts, deficits and military costs. But if elected officials are intent on this benefit, it should at least be simpler and less open to fraud.

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