Officials target seniors' program Budget strain seen as drug plan grows

By Michael Crowley, Boston Globe Correspondent, 10/25/99

No sooner had Beacon Hill leaders completed an Oct. 13 news conference announcing a drastic $41 million increase for seniors' prescription drug costs than budget hawks began warning that the state was straying into dangerous budget territory. House Speaker Thomas M. Finneran, for instance, declared last week that the new funding ''will test our financial capacity to sustain it,'' and warned that it could require new tobacco or alcohol taxes.

House Ways and Means Chairman Paul Haley noted that a similar program in New Jersey costs $240 million per year, and has grown by $70 million in the past three years. New Jersey's program cost $8 million when created in 1978.

Massachusetts' program ''clearly has the potential to grow enormously,'' warned Michael Widmer, president of the Massachusetts Taxpayers Foundation. ''We are concerned about the implication of the state taking this on and trying to solve it over the long term.''

Few dispute the wisdom of helping senior citizens cope with crushing drug costs, which can sometimes force them to choose between food and medicine. Prescription costs have become the fastest-growing category of health care spending, analysts say. Hospitals and health maintenance organizations are cutting back on drug coverage, forcing some seniors to pay thousands of dollars for their medication annually.

But many on Beacon Hill say it is the federal government's responsibility to solve a growing national health care crisis. While presidential candidates like Vice President Al Gore call for Medicare coverage of prescription drug costs, few expect Congress to deliver a sweeping overhaul anytime soon.

Some analysts say state lawmakers will be tempted to expand a program that is immensely popular with politically influential senior citizens.

''These are prime voters we're talking about,'' said Robert Blendon, a specialist in public opinion and health at Harvard University. ''These are people you do not walk away from once you give them a benefit. I think the state will be in this business as long as the federal government doesn't deal with it.''

While the concern may not seem urgent in flush times like these, fiscal watchdogs warn that high-priced prescription aid programs will be difficult to maintain over the long term.

''There's a major difference between trying to help a problem like this on the margins and having it become a full-blown entitlement, which would clearly strain the resources of the state,'' Widmer said. This month's Beacon Hill budget agreement would expand the $30 million Senior Pharmacy program, established in 1996 with tobacco tax revenue, to an annual $51 million. Seniors with incomes up to $15,498 would qualify for $1,250 in annual aid. It would provide an additional $20 million for seniors of all incomes who have massive or ''catastrophic'' drug costs.

The Senate had originally sought a $70 million expansion of the program, while the House sought no new funding.

Haley cites as a cautionary example New Jersey, where Governor Christine Todd Whitman and the state Legislature are continually warring over the size of the state's prescription aid program, which is growing at a rate of 9 percent a year. New Jersey's program is far more generous than Massachusetts', however, offering unlimited drug coverage to seniors making up to 200 percent of the poverty line.

Senate Ways and Means Chairman Mark Montigny, the chief proponent of expanded pharmacy aid, said he hoped the federal government would soon address the problem. But he said he felt a responsibility to address an issue he described as ''literally life-and-death.''

''Today I see nothing to suggest we don't need to continue to help fixed income seniors going forward,'' Montigny said. ''We need to keep helping these folks.''

Montigny noted that direct state subsidy to seniors is not the only answer, and that budget negotiators are still considering other measures.

One would create a commission to explore whether to set up a state-run insurance program to protect seniors from catastrophic drug costs that can wipe out life savings.

But critics say recent proposals to create such a plan, such as one unveiled in July by Governor Paul Cellucci, would do little to help low-income seniors whose drug costs may not qualify as catastrophic, but still consume a major percentage of their income.

Another proposal, offered by the House, would require the state to make bulk purchases of prescription drugs at a discount of up to 20 percent.

That notion alarms pharmaceutical companies, who say reduced profits will drain essential dollars from research and development of new drugs.

Critics accuse the industry of profiteering, however, and say drug makers spend only modest amounts on developing new drugs. They note that prescription drug prices in the United Staes are the highest in the world, and that senior citizens have begun traveling to Canada and other countries to save thousands of dollars on medicine.

These critics say state programs could become far more affordable if legislators had the will to confront pharmaceutical giants.

But the pharmaceutical industry is a powerful adversary. The industry spent more than any other lobby in Congress, including the National Rifle Association and tobacco companies last year, according to the Center for Responsive Politics.

In Massachusetts, drug makers have already spent $400,000 on lobbying this year and no radical overhauls affecting the industry are expected. The most dramatic measure, filed by Representative Pat Jehlen, a Somerville Democrat, would require the state to purchase prescription drugs in bulk, and offer them to seniors at up to a 40 percent discount. But the pharmaceutical lobby has made Jehlen's bill a target and it is given little chance of passage.

Jeff Trewett, spokesman for the Pharmaceutical Research and Manufacturers of America said the industry prefers the problem be left to Congress, to avoid a ''crazy patchwork quilt'' of state programs.

Blendon agrees that sweeping changes are best left to the federal government. But he said state lawmakers might not entirely mind having to deal with the issue.

''You really can say you are concerned about the elderly in one line,'' Blendon said. ''It's a wonderful campaign issue.''


This story ran on page B01 of the Boston Globe on 10/25/99.