Wednesday, June 30, 1999

Providing prescription
drugs under Medicare

Bullet The issue: President Clinton has proposed broad expansion of Medicare to provide prescription drugs to all beneficiaries.
Bullet Our view: Such as expansion would be expensive and unnecessary.

MOST older and disabled Americans depending on Medicare find supplementary insurance and other sources for prescription drugs, which generally are not included in Medicare. Lower-income seniors need help in obtaining affordable drugs, but that should not require the costly comprehensive approach proposed by President Clinton.

Medicare will face enough financial problems preparing for the retirement of the baby-boom generation without unnecessary expansion of a program that is already far more expensive than originally envisioned.

The government would pay half of the first $2,000 of drug costs in a year. The administration estimates the benefit would cost the government $118 billion over 10 years. The monthly premium would rise gradually from $24 to $44 a month and the initial $2,000 cap would rise to $5,000 by 2008.

Nine of every 10 Medicare beneficiaries use prescription drugs, with an average annual expenditure of $637, according to a federal study in 1997. Only 10 percent spend between $1,000 and $2,000 a year, and only 4 percent spend more than that.

Seniors now purchase drugs through supplemental Medigap policies or, if they are too poor, through Medicaid. However, a representative of AARP testified that annual Medigap premiums often exceed $1,000 and drug coverage is quite limited. Also, two of the Medigap policies that cover prescription drugs have annual caps of $1,250 on drug coverage, and the third is capped at $3,000. All three policies require the beneficiary to make a 50 percent co-payment.

Thus millions of Medicare recipients can't afford the cost, and this is the group that requires help. What is needed is a new plan at nominal cost that deals with the problems of the 15 million seniors who now lack prescription drug coverage.

Instead, the Clinton administration proposes a sweeping program covering all Medicare beneficiaries. Although seniors would have the option of remaining with private programs, administration officials estimate that 31 million of Medicare's 39 million beneficiaries would choose the Medicare prescription drug program.

Changes may be needed in Medicare in preparation for the influx of beneficiaries when the baby boomers began enrolling in 2011, but inclusion of all beneficiaries in a prescription drug program is not one of them.

China overrules
Hong Kong court

Bullet The issue: China's legislature has overruled Hong Kong's highest court in a decision on immigration.
Bullet Our view: The action casts doubt on China's promise that Hong Kong would be autonomous.

CHINA'S pledge to keep hands off Hong Kong after the former British colony was returned two years ago looks tarnished now. The Chinese legislature has overruled the Hong Kong high court, leaving residents wondering what is left of their promised autonomy.

In a 1984 agreement with Britain leading to the turnover, Beijing vowed noninterference with Hong Kong's free, capitalist system for 50 years. That promise has now failed its first test.

The question involved immigration to Hong Kong from China proper. Hong Kong's Court of Final Appeal ruled in January that any Chinese citizen with at least one Hong Kong parent was eligible for a residence permit, even if that person was born out of wedlock or before one of the parents had received the right of abode in the territory.

Fearing that the decision meant Hong Kong would be swamped with more than 1 million immigrants, Chief Executive Tung Chee-hwa asked the Chinese National People's Congress to reinterpret the territory's Basic Law, or constitution. The legislature said that only children whose parents were residents when they were born could move to Hong Kong.

Many Hong Kong residents shared Tung's concern about a deluge of immigrants. But opposition politicians, jurists and human-rights activists denounced the legislature's decision as a setback for the rule of law and for Hong Kong's autonomy.

Martin Lee, a prominent leader of the democratic opposition, charged that China would like to control Hong Kong's courts. The bar association issued a statement deploring Beijing's decision. Hundreds of people who face deportation protested outside Hong Kong's immigration office.

Tung, who was appointed by Beijing, said he requested China's intervention as a last resort and that he treasured the rule of law in Hong Kong. But when the first test came, Beijing ignored its vow and overruled the Hong Kong court.

That is an ominous sign, but the circumstances were so unusual that the significance of the precedent isn't clear. The question is vitally important to Hong Kong's future as a regional trading center.

Published by Liberty Newspapers Limited Partnership

Rupert E. Phillips, CEO

John M. Flanagan, Editor & Publisher

David Shapiro, Managing Editor

Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Frank Bridgewater & Michael Rovner, Assistant Managing Editors

A.A. Smyser, Contributing Editor

Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
[Stylebook] [Feedback]

© 1999 Honolulu Star-Bulletin