Congressional Action on a Medicare Drug Benefit or the Uninsured Unlikely, CQ’s Goldreich Says

President Bush's proposal for a Medicare prescription drug benefit will "likely die quickly as key members [of Congress] question whether it makes sense to have state Medicaid programs deliver a benefit without guarantees of permanent federal support," Congressional Quarterly senior reporter Samuel Goldreich says in this week's " Congressional Quarterly Audio Report." Bush's plan, outlined in his fiscal year 2003 budget proposal, seeks $77 billion over 10 years to introduce a drug benefit as part of a $190 billion Medicare overhaul. As part of the plan, Bush is proposing to pay states up to 90% of the cost of expanding their own drug programs under Medicaid. Goldreich states that lawmakers on both sides of the aisle were "glad to see" that Bush "remains committed to creating a drug benefit," but "even members of his own party say his numbers don't add up for Medicare in the short-run or the long-run unless [Congress] were to slash payments for hospitals and other provider groups." Goldreich adds that HHS Secretary Tommy Thompson "raised even more questions" about the plan when he said that funding for states would be phased out after three years, which means that governors are unlikely to go along with the proposal because it could leave states paying for a new entitlement without the federal government's help. "Offering the governors a 90% match to expand Medicaid and taking it away after three years would be like giving a junkie pure heroin and telling him to go to cold turkey once he's hooked on the higher dosage," Goldreich states. He says that with action on a drug benefit unlikely this year, lawmakers may instead focus on increasing Medicare payments to providers.

The Uninsured
Discussing the uninsured, Goldreich states that President Bush's proposal to allocate $89 billion in tax credits is "in some ways a big step forward" from a similar proposal he made last year "in terms of making a compromise with Democrats," because it allows the uninsured to buy into Medicaid, CHIP or public employee programs. This provision attempts to allay Democrats' concerns that tax credits offer "none of the risk-sharing or cost benefits" of coverage through public insurance programs. However, the plan has not "been embraced" by Democrats, who complain that there is no requirement that states participate in tax credit programs. They also note that the only "new money" allocated to help states start these new purchasing pools is $3.2 billion in unused CHIP funds. Goldreich concludes that there is a "good chance" that Congress won't be able to agree on any measures to help the uninsured this year, but if it "passes anything at all -- anything Bush would sign -- it would have to include both tax credits and a boost in funding for Medicaid." Goldreich's full report is available online (Goldreich, "Congressional Quarterly Audio Report," 2/11).