Commentary: Measuring The Merits Of Bush's Drug Plan

Politicians' talk about heath-care reform may not do much for your Aunt Sally's arthritis, but it sure can cure what ails a campaign. Vice-President Al Gore found that out when he was floundering in his race for the White House. He raged against uncaring HMOs and laid out a prescription-drug benefit plan for seniors. Suddenly, his poll numbers took off. "It's raised him from the dead," says one lobbyist.

Now, beleaguered rival George W. Bush is hoping for a hit of the same tonic. On Sept 5, before a group of seniors in Allentown, Pa., he unveiled his own sweeping plan to fix Medicare and subsidize seniors' drugs: Give $48 billion to the states over the next four years to buy medicines for low-income seniors and ensure that no elderly person shells out more than $6,000 a year for drugs. Then, Bush would spend another $110 billion between 2004 and 2010 to change Medicare, giving beneficiaries a choice of affordable private health-insurance plans with drug coverage. "Keeping the promise of Medicare and expanding it to include prescription-drug coverage will be a priority of my Administration," he vowed.

The Texas governor's plan is clearly a political necessity. "Bush has had a terrible run lately," explains left-leaning Brookings Institution economist Henry J. Aaron. "The issues that have become salient, like health care, are the ones in which the Democrats have more legitimacy. He has to do something to get into the ball game."

Certainly, Bush has taken a mighty swing. Drug industry players are offering up kudos for his promise to quickly bring relief to seniors and avoid setting up a new federal bureaucracy. "This is the right prescription for this problem," says Craig L. Fuller, CEO of the National Association of Chain Drug Stores. Even the insurance industry, which has deemed the GOP Congress' plan to offer subsidized private drug insurance unworkable, is enthusiastic.

What's more, the Bush team adds, it beats the $338 billion Gore proposal, which simply attaches coverage to the existing Medicare program beginning in 2002 and which would not fully kick in for another eight years. Nor do the Democrats offer reform for what many see as a bloated federal program, as Bush does.

It remains to be seen how well all this will play in Middle America. Some health-care experts say that Bush's swing for the fences may end up being little more than a single. Take the $48 billion block grants to the states. The National Governors Assn. has already said the states don't want the responsibility. Allocating the money among 50 states and identifying seniors who qualify for help could be a nightmare. And given the huge difficulty of larger Medicare reform, the second, $110 million stage of Bush's plan is hardly secure. "At least with Gore, you know what you've got," says one drug-industry exec. "With this, I'm not sure a single person will know if they will definitely benefit."

Another potential flaw, economists say, is the claim that competition will slow growth in Medicare costs. Bush is hoping those savings would enable him to sweeten the drug subsidy. But economists such as Princeton's Uwe Reinhardt believe the past decade shows that the move to managed care brings only a one-time savings. Since Bush plans to spend far less than the $338 billion the Congressional Budget office estimates the Gore plan would cost, the elderly will get more from the Democrats.

At least each candidate is now offering a choice: Gore's approach of working through the existing Medicare bureaucracy, or Bush's combination of state actions and private insurance that strives for both lower Medicare costs and sufficient drug subsidies. Come November, voters will have to live with one of the prescriptions.