Executive Summary

PRESCRIPTION DRUG COVERAGE INCLUSION IN MINIMUM HEALTH INSURANCE benefits for all individuals is suggested by the Advisory Council on Social Security at a July 26 meeting. The panel took no official votes on the issue, but concurred informally when asked by Chairwoman Deborah Steelman whether members agreed that drug coverage should be included. The council is designing a minimum health benefits package, but has not yet specified how to ensure that all individuals are covered by such a package. The benefits package will include acute hospital services, diagnostic x-ray and lab services, and medically necessary physician and surgical care for outpatients. The panel agreed that all individuals should be eligible for these core benefits and that low-income families would probably need to be subsidized -- however, it has not delineated what role the government should have in either mandating or financing coverage. The council did not address specific features of a drug benefit. The group plans to discuss the scope of coverage as well as deductibles and copayments at a meeting in September. At that time, staffers will also present cost estimates for the drug coverage. The recommended minimum benefits package will be included in the council's January 1991 report to HHS Secretary Sullivan. The Social Security statutes require that the council be convened periodically. A group assembled in the early 1980s and chaired by Otis Bowen developed Medicare reform proposals that formed the basis for the catastrophic coverage plan Bowen advocated when he became HHS secretary. The current panel is chaired by D.C. attorney Deborah Steelman (Epstein Becker & Green), who acted as the top domestic policy advisor in the Bush presidential campaign. From the outset, the present group has had difficulty reaching agreement. Last fall, Steelman presented one proposal for health care reform after unsuccessfully trying to build a consensus with members individually. The panel then decided to undertake a comprehensive examination of the national helath care system. The council also decided to hold public hearings, an approach Steelman disagreed with in June, saying it would duplicate work already done by others. About five hearings will be held. During the group's discussion, Steelman said that drug coverage "must be included in a minimum benefits package" because it is "one of the most cost-effective services." She indicated that her "personal prejudice" is for a broader benefits package that is accompanied by greater individual cost-sharing. However, commission member Lawrence Atkins, PhD, employee benefits policy director for the New York law firm Winthrop, Stimson, Putnam and Roberts, was more cautious about including drug coverage as a core service. "To require prescription drug [coverage] is a major benefit expansion that will be expensive and difficult to administer," he said, referring to the revoked Medicare catastrophic care drug benefit as evidence. Metropolitan Vice-Chairman Philip Briggs disagreed with Atkins, noting that drug coverage is routinely reimbursed by most private insurers and Medicaid plans, and also is much less expensive for those under age 65.