GOP Forms Prescription Drug Plan

Republicans got a surprising boost Tuesday from AARP, the nation's largest and most powerful seniors group on an issue that's bedeviled Washington for years -- prescription drugs for seniors.

"I think it's important news that there is one party that can essentially control the outcome here," Chris Hansen, director of advocacy for AARP told Fox News. "In terms of getting to a final conclusion, I think having one-party control, whichever party, it is probably a good thing. I think Republicans are serious about making this a priority."

Hansen said that AARP, which favors universal drug coverage, would be willing to endorse a less expensive alternative that only covers the 11 million seniors on Medicare who have no prescription drug coverage.

"If we have to accept a first step first, a first step can be a step in the right direction, a step that can be built upon," he said.

This could be good news for the Bush White House and congressional Republicans as they prepare a prescription drug push in the 108th Congress. The White House is reviewing proposals and a big push is expected in the president's State of the Union address in January.

The president favors a limited Medicare drug bill that emphasizes coverage for the uninsured. Right now, most GOP proposals provide $300 billion in benefits over 10 years.

"It's a bit irresponsible to try to come in with universal coverage over all of our senior population when many of these people don't need it," said Sen. Chuck Hagel, R-Neb., a member of the Senate Budget Committee that will write the broad outlines for a Medicare drug benefit.

"People who are fairly well off and who are now buying their own insurance, I don't think that was the intent of government programs so we focus on those who need most, first, that's the first priority."

Costs are sure to be a huge issue, especially as Congress continues to face budget deficits for the next few years. 

According to the Congressional Budget Office, seniors this year are expected to spend $87 billion on prescription drugs. But by 2012, the CBO estimates drug costs for seniors will more than triple, rising to $278 billion. So, when Republicans talk of a 10-year plan with $300 billion in drug benefits, current cost estimates for the 10 years from 2002-2012 are more than $1.8 trillion.

Hagel said Congress must ensure that a drug benefit package does "not saddle generations to come with hundreds of billions of dollars in new additional programs already on a Medicare system that is broken that needs reform terribly."

But Hansen and other advocates of universal drug coverage contend that drug coverage will lower overall Medicare costs -- by shifting them away from costly emergency room and doctor's visits and toward more manageable and anticipated drug costs.

"I think clearly, you'd much rather have people taking prescription drugs to control blood pressure, rather than taking people to the hospital for the aftermath of stroke," Hansen said. "There is a cost impact, but there is an impact to society anyway. I mean we've got people out there making the choice of taking the prescription drugs they need to stay alive and eating. We can make the case that is probably more monetarily efficient for society to let people die, but it's not a very good answer."

Republicans, however, are forced to operate in the strange world of congressional budgeting, where only projected costs -- but not projected savings -- are counted when determining how much a drug benefit package will cost.

Hence the GOP push for overall Medicare reform. Republicans want to make the vintage program, created in 1965, more efficient by finding ways to save on benefits for visits to the doctor and hospital stays.

"We essentially are driving a 1965 model now into this new 21st century. That doesn't make any sense," Hagel said. "When we first put together Medicare in 1965, there was no focus on preventative measures, there was no focus on diet, on exercise, hence prescription drugs aren't even covered. It's not relevant anymore what we're doing, and we're wasting billions and billions of dollars of taxpayers' money and not really getting the job done."

Bush has told lawmakers he will not sign a drug bill without significant Medicare reform.

"Real Medicare reform is absolutely critical and it must be done and I hope over the next two years it will be done," Hagel said.