Medicare drug benefit is complex hybrid

Debate is already going over how to change it

Published: Monday, Feb. 6 2006 12:00 a.m. MST

WASHINGTON — The passage of the Medicare Prescription Drug, Improvement and Modernization Act was an effort to blend a classic big government program from the Great Society with the conservative market-oriented philosophy of the Republicans in power. It was supposed to be one of the great domestic policy achievements of the Bush presidency.

But today, as state and federal officials struggle to implement the program offering Medicare beneficiaries a long-sought prescription drug benefit, they face widespread complaints from beneficiaries, advocates, pharmacists, lawmakers and others that it is too complex, too cumbersome, too hard to navigate. Congressional committees are holding hearings on problems in the rollout of the plan, which began Jan. 1, and debate has already begun over how to change it.

Even President Bush seems, at the moment, reluctant to tout its advantages; he never mentioned it during his 52-minute State of the Union address last week.

Administration officials say the startup of any vast new social welfare program is bound to encounter difficulties; they say these are largely growing pains for a system that covers 42 million older and disabled Americans. They testified that competition among private health plans was already lowering expected costs for the program, while giving retirees what they were promised — a wide choice of drug plans at reasonable prices.

But some experts say the new Medicare program, by its very structure, was destined for trouble. Drew Altman, president of the Kaiser Family Foundation, a nonpartisan health research group, calls it "a compromise between competing ideologies shoehorned into a fixed budget." He added, "I think it was preordained from the moment they passed it that it would be historically complicated to implement."

As they look back, the architects and leading supporters of this plan say that every political decision behind the new Medicare program — its structure, its cost, the way it is delivered — made sense at the time it was made. Taken as a whole, however, the plan's creators came up with a complex hybrid, a melding of government and private markets that requires intricate coordination among insurers, beneficiaries, and state and federal agencies.

In recent weeks, older Americans have struggled to choose among a dizzying array of 40 or more different drug plans, with different premiums, co-pays and lists of covered drugs. States have intervened to cover many low-income elderly who were falling between the cracks in their transition to the new Medicare program. Pharmacists have reported delays and difficulties in determining who is eligible for which benefits.

Rep. Bill Thomas, the chairman of the House Ways and Means Committee and a principal architect of the program, defended the Medicare law in an interview and suggested that it was the best a bitterly divided Congress could do.

"We got the bill we could get," Thomas said. "And then those who tried to make sure it wasn't law, began immediately to attack it."

In fact, the Medicare law is a case study in political accommodation in an ideologically polarized time — the difficulty in bridging sharply different world views on the roles of government and private markets — and the consequences of that accommodation in the real world, when the program begins.

The final legislation reflects the complicated compromises of frenzied months of negotiation before the bill's passage. Conservatives insisted on an array of incentives in the bill to attract more private insurers and inject more competition into Medicare.

But the AARP and other groups insisted that the traditional Medicare program be protected from a competition rigged to favor private plans. Many lawmakers, who otherwise disdained the market-oriented approach, were drawn to the bill because of its substantial benefits for low-income elderly. Other lawmakers, particularly in the Senate, were drawn by the legislation's new assistance for rural areas.

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