Teresa Heinz Kerry and Medical Policy

Saving the prescription plan for seniors


By Teresa Heinz Kerry and Jeffrey Lewis, 5/17/2003

OVERNOR ROMNEY'S recommendation to eliminate the Prescription Advantage Program for senior citizens is a reminder that age discrimination still exists. Ending Prescription Advantage affects the oldest and most vulnerable citizens in Massachusetts. The governor's message is ''your needs are too great and the costs are too high for us.'' People deserve better. The state is acting like an insurance company by getting rid of the people who need help the most. At a time when states are dismantling Medicaid programs due to soaring costs and indecision on a Medicare prescription drug benefit, the elimination of Prescription Advantage guarantees that Medicaid enrollment and costs will skyrocket even further.


In addition, the elimination of Prescription Advantage guarantees that poorer seniors will end up in hospital emergency rooms because they cannot afford their prescriptions; more seniors will enter nursing homes because their acute illnesses will become chronic and, in some cases, life-threatening.

Prescription Advantage is cost effective because it helps to manage chronic conditions and can help keep seniors out of nursing homes, which cost on average $3,000 to $5,000 per month.

Instead of proposing to eliminate Prescription Advantage, the governor should have considered several options to save it.

In 2000, when the Heinz Family Philanthropies recommended the creation of a statewide prescription drug program for seniors, a blueprint was prepared showing how it could be done and what it would cost. When the final bill was passed by the Legislature, a number of changes were included resulting in higher costs.

If the original Heinz Plan had been adopted, the cost today would be about $43 million -- not the $86 million based on current actuarial calculations for fiscal year 2003. This fact is critical because the only reason the governor offered for eliminating the program were costs, while ignoring the tremendous benefits it offers to seniors and the long term savings it presents.

Instead of declaring the program dead on arrival, the governor should have considered the following options:

The program needs to go back to basics. This means, like any insurance plan, members should pay a monthly premium based on income. Requiring a modest $10 monthly premium from those lower-income seniors could result in $4.6 million in savings.

Alternatively, seniors could be charged an annual enrollment fee. This fee could be charged to current members and new members when they enroll. A $35 annual enrollment fee produces $3 million in annual revenue and requires considerably less administration.

When Prescription Advantage started, seniors were given considerable time to decide whether to join -- more than one year. As a result, many joined only when they got sick, resulting in adverse selection, and adding to the overall cost of the program. Limiting enrollment to 60 days after the 65th birthday, similar to Medicare, creates a savings of $8 million. Seniors who do not sign up upon turning 65 could be excluded from joining or asked to pay a fine for their late membership.

The current Prescription Advantage covers the cost of both generic and brand-name drugs. One way to reduce the overall costs of the program is to limit the medications that are covered. For example, providing seniors access to all generic medications at $12 per prescription, but requiring them to pay 80 percent of the costs of brand-name drugs (unless specifically ordered by their doctor), results in a savings of more than $41 million. Or, if we increase brand-name coverage to 50 percent, the savings would be $14.8 million.

Finally, Massachusetts is pursuing a waiver from the federal government to shift many of the lower-income seniors from Prescription Advantage to Medicaid. If it is granted this, too, will result in a significant savings. This is a time to reexamine history, not reject it. People have a right to expect government to approach their problems with common sense, compassion, and fiscal restraint. Senior citizens deserve prescription drug coverage. Now that we have shown how it can be done, it is time for Romney to do it.


Teresa Heinz Kerry is chairman of the Heinz Family Philanthropies. Jeffrey Lewis is president.

This story ran on page A11 of the Boston Globe on 5/17/2003.


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