On January 28 the Bush Administration released their $2.13 trillion proposed budget for fiscal year 2003. The proposal seeks a $38.3 billion increase in defense spending but most domestic program funding is held flat. Programs not related to defense or national security may see only a 2% increase. Among the domestic proposals are the Administration's health care hopes, which include calls for a Medicare prescription drug benefit and tax credits for the uninsured:

$190 billion over 10 years for broad-scale Medicare reform. Of this amount, $77 billion would go to states to provide prescription drug coverage to low-income seniors.

An $89 billion tax credit to help the uninsured purchase health insurance. This would mean a $3,000 credit for a family making $25,000 a year and $1000 for an individual making $15,000 a year.

Prescription Drugs and Medicare Reform
Medicare is the nation's largest health insurance program, which covers over 39 million Americans. Medicare provides health insurance to people age 65 and over, those who have permanent kidney failure, and certain people with disabilities. At present, it does not cover or subsidize the cost of prescription drugs.

Under the proposed budget, the federal government would pick up 90% of the cost of a prescription drug benefit added to Medicare, requiring states to cover the final 10%. However, most states are already financially strapped due to the economic downturn and monies spent improving domestic security in the state. Some are worried that states will not be able to contribute to the benefit without drastically cutting funding to other government health care assistance programs.

Ron Pollack, the executive director of Families USA, a non-profit health care advocacy group, is among those concerned that states will not be able to meet the 10% required of them to enact prescription drug coverage, calling it "a requirement that many states will be unwilling to shoulder given their own tight budgets. In effect, therefore, the President's budget offers little in terms of prescription drug relief for America's seniors." (1)

The Administration hopes to extend prescription drug coverage to low-income seniors first. Still, the number of seniors who will actually benefit in the first phase of the proposed prescription drug benefit is lower than many would have liked. At the start, the program would cover seniors with incomes up to 150% of the federal poverty level-about $12,880 for singles and $17,400 for couples. An unspecified amount would also go to a limited drug benefit for Medicare recipients who are above the 150% level, but no estimate was given on how much this subsidy might be or how it would be distributed. (2)

Analysts think that the House will pass a prescription drug bill this year, but the likelihood of one passing in the Senate is lower. The Senate Democratic leaders oppose the Medicare reform approach set out in the Administration's budget proposal. Democrats claim at least $300 billion over 10 years is needed for Medicare reform and a drug benefit, taking into account the fact that much of the Baby Boom generation retires in 2010.

According to John Rother, AARP's director of legislation and public policy, "$190 billion clearly is inadequate" for covering a prescription drug benefit as part of Medicare. He predicts the amount will be pushed up as Congress debates the details of prescription drug benefit legislation. (3)

Aside from the lack of prescription drug coverage, another increasing problem for those receiving health care through the Medicaid and Medicare system is that physicians and other health care providers are no longer accepting their Medicaid and Medicare plans. Because government plans reimburse at significantly lower levels than private insurance, many physicians can no longer shoulder the shortfalls incurred at the end of each month from the substandard reimbursements. Under the most recent Medicare formula, physicians suffered a 5.4% cut in reimbursed fees for services provided to Medicare patients. The Bush Administration says it is aware of this problem and will not cut payments to providers to make up for shortfalls in other areas of government health care assistance. The Administration warns, however, that keeping up adequate reimbursements to doctors may necessitate cuts in other areas.

The Uninsured
The Bush Administration seeks to aid uninsured individuals and families with a tax credit amounting to $3000 or less per family or $1000 or less per individual depending on income. Families with annual incomes between $25,000 and $60,000 and individuals with annual incomes between $15,000 and $30,000 would receive a smaller sum.

Many legislators and health care advocates do not believe that the proposed tax credit will provide any substantial assistance to families and individuals who currently lack health insurance. A recent study found that the average annual premium for a standard health insurance policy is $2,395 for a young, healthy woman and $4,734 for a healthy 55-year-old woman. Costs rise substantially for men and those who have prior health conditions. (4) According to the Kaiser Network, ranking member of the Ways and Means health subcommittee Rep. Pete Stark (CA) said, "There's no way we can say we're giving [the uninsured] decent coverage at a price they can afford." (5) The tax credit is estimated to reduce the net number of uninsured persons by 5%, or 2 million. Currently there are between 39 and 41 million uninsured persons in the U.S.

GENERAL ASSEMBLY
The 211th General Assembly (1999) approved health care guidelines for congregations, middle governing bodies and GA entities. Their report directs the Washington Office to advocate for a rational, just health care system available to the entire U.S. population (See Minutes, 1991, Part I, p.817). Until such a plan is adopted, the Washington office is directed to advocate on behalf of the uninsured, underinsured, and other vulnerable populations. Also reaffirmed is the need for a health care system that provides physical and mental care which is adequate, affordable, and accountable.