Debit Cards Fill the Bill on Prescription Drugs

Jeanette Thompson is a grandmother and office manager who has constant pain in her hand from arthritis. Most arthritis drugs, she said, “feel like they are burning a hole in my stomach.” Her doctor prescribed Celebrex, a newer anti-inflammatory that eliminates gastrointestinal irritation. Her insurer, United Healthcare, refused to pay, saying that she would have to suffer with older, cheaper drugs like Naprosyn until her doctor proved she was developing an ulcer. So much for preventive medicine.

Unfortunately, prescription drug plans proposed by both George W. Bush and Al Gore would force seniors to settle for cheaper, less-effective substitutes rather than the drugs their doctors prescribe. But there is a better way: a prescription drug debit card.

Debit card technology has transformed the federal food stamp program, which used to be notorious for fraud and waste, into a model of efficiency. About half of the states have replaced food stamps with food debit cards. These states issue a card and set up an electronic account for every eligible family. When a cardholder makes a purchase and punches in the personal identification number, the card automatically deducts the purchase price. No change is given, using a stolen card is almost impossible, administrative costs are far lower and fraud is a thing of the past. Copying the success of the food debit cards could help millions of seniors pay for prescription drugs.

For the elderly, prescription drug needs are as predictable as the need for food, not the kind of sudden expenses that insurance is designed to cover. Seniors take the same medications day in and day out to treat high blood pressure, arthritis and other chronic conditions. They don’t need drug insurance, they need debit cards. Drug debit cards would give seniors purchasing power without limiting where they can shop, which medications they and their doctors choose or how the marketplace prices them. Congress should begin by making two uninsured groups eligible for debit cards: low-income seniors and seniors with diabetes, arthritis and other chronic illnesses that require costly drug treatments.

How much purchasing power to put on a senior’s card each month would be based on income and on whether his doctor certifies him as having a minimal, moderate or high-cost need for medications. A co-payment could reduce the cost of the benefit and discourage over-consumption.

Drug debit cards could end the stalemate in Congress over prescription drugs. On the one hand, Democrats have correctly insisted that most private insurers are unwilling to sell policies covering only drugs, so they have rejected Republican proposals to offer seniors vouchers to buy such policies. On the other hand, Republicans are worried about government limiting seniors’ choice of medications and have run television ads warning that the Clinton prescription drug plan would “interfere with what is in your medicine chest.” The warning is accurate.

Under the Clinton and Gore drug plans, the federal government would join in a risk-sharing arrangement with regional prescription drug managers, giving them the authority to decide which drugs are covered by Medicare. Risk sharing means the more you take, the less drug managers make. It gives the managers a powerful incentive to limit drug choice to the cheapest.

Of course, private insurance companies also try to limit choice of medications to boost their profits. That’s the problem with Bush’s proposal, which merely provides seniors with vouchers to help pay for private insurance. Drug-only policies would give insurers an even bigger incentive to turn down seniors for expensive but highly effective drugs such as Celebrex, Fosamax (osteoporosis) or Lipitor (high cholesterol). If an elderly person lands in the hospital or on the operating table as a result of this cost-cutting, the drug insurers don’t have to pay. The patient suffers the medical consequences, and Medicare picks up the tab.

Drug debit cards would help seniors afford their medications without the added cost of private insurance or a government-run insurance program. Providing uninsured seniors with debit cards instead of insurance would keep decisions about medications in the hands of their own doctors, where it belongs.