MEDICARE RX

Prescription drug coverage is a good idea, but costs must be
controlled

HEALTH care has changed a good deal since Medicare was created in
1965. President Clinton's proposal for prescription drug coverage will
help the system catch up with the times.

But it's not the only change that's needed. Without an updated
approach to to financing Medicare, we'll end up with a wonderful plan
that can't afford to pay its bills.

Drug coverage would recognize that for many elderly Americans, it's
not surgery or office visits, but an array of medications -- for high
blood pressure, diabetes or cholesterol -- that extends life.

Clinton's plan is voluntary and fairly modest. Medicare recipients who
sign up for prescription drug coverage will pay premiums of $24 a
month for Medicare coverage of half of their drug costs up to $1,000 a
year. (The figures will increase to $44 and $2,500 by 2008.) With
Medicare's ability to bargain for lower prices, the benefit could be a
substantial help to the 15 million elderly Americans who have no drug
benefits from HMOs or ``Medi-gap'' policies. A glance at Grandma's
medicine cabinet shows that today, the ever higher cost of
prescription drugs can jeopardize older people's health as much as
accidents and disease.

But while improving Medicare's benefits, it's also important that the
health of the system itself not be jeopardized. Clinton's plan calls
for setting aside $45.5 billion of the anticipated budget surplus to
pay for drug coverage through 2008. That is supposed to be partially
offset by savings in other parts of the program. But will the economic
boom last forever? Will Washington get better at saving money than
spending money?

Even if the good times keep rolling, and 15 percent of the surplus is
dedicated to Medicare, as Clinton wants, the system is projected to
run out of money in about 25 years. If the economy falters and
surpluses disappear, the day of reckoning will come much sooner.

Less spending, more income: some combination of those two factors is
what will save Medicare (and Social Security, too). Politicians insist
they can't sell Americans on such common-sense belt-tightening. But
have they tried?

When individual Americans look at their budgets, they figure out how
much money they make, then how much they can spend. Washington does it
backward, first figuring out how much it wants to spend on Medicare
benefits, then coming up with smoke-and-mirrors schemes of where the
money is going to come from.

Ordinary Americans know that just because they could afford to eat
filet mignon last month, there's no guarantee they won't have to get
by on hamburger next month. But once Washington creates an
entitlement, it's almost impossible to trim it, however modestly or
temporarily.

A prescription drug benefit is a good idea. But means-esting --
offering coverage only to the poor -- should be considered. Higher
premiums for prescription coverage, or other parts of Medicare, should
be looked at. Trimming some benefits, however unpopular, must be examined.

Medicare is a good system, but it must keep up with the times.
Prescription drug coverage should be part of the picture. Finding new
sources of revenue and new ways to save money must also be part of the
picture if Medicare is to survive.