Drug Deal Called ÔDoable'
By: Source: AARP Bulletin Today Date Posted: 2003-10-31 14:10:00-05:00
Republican leaders say they are confident President Bush will sign a Medicare prescription drug benefit into law by late November. "It'll be a Thanksgiving present to our senior citizens," predicts Sen. Chuck Grassley, R-Iowa.
That's still an ambitious goal. But just as the AARP Bulletin went to press, the 17-member Senate-House negotiating committee that is working on a final bill overcame one major hurdle. It agreed to provide government-run drug coverage as a "fallback" in areas where private health plans don't enter the market.
This provision has been a sticking point for many senators, including Grassley and Edward Kennedy, D-Mass., who have said that selling a final bill to the Senate would be difficult without it.
Any final compromise, which Grassley calls "doable" by early November, must go to a vote in the full House and Senate where there are deep divisions—not always along party lines—on what lawmakers say they will accept.
The other most contentious issue is a House proposal to allow private health insurers to compete directly with traditional Medicare. Most Democrats and some GOP senators bitterly oppose this idea, but some House Republicans say they will not support a final bill without it.
At press time, the committee was trying to cut a deal on this issue. "There's an understanding on our side that something must be done to satisfy the House," says Grassley, leader of the Senate negotiators.
Trying to fit many items of this Medicare package into a budget of $400 billion over 10 years has produced controversial cost-saving ideas that were not in the original House and Senate bills passed in June.
One recommendation would require high-income beneficiaries to pay a higher Medicare Part B premium, which covers doctors' and outpatient services. This would be the first time Medicare premiums have been pegged to income. It is strongly opposed by most Democrats, but is likely to be part of the final bill. Another cost-saving idea, requiring beneficiaries to make copayments for home health services for the first time, was discussed but eventually rejected by the committee negotiators.
No details of the drug benefit itself were known at press time. But sources expect it to contain a large gap—the so-called "doughnut hole"—between the limit of covered annual drug costs (probably around $2,200) and the level at which "catastrophic" coverage for high drug bills kicks in. Enrollees would have to pay all costs in that gap, as well as monthly premiums.
Alarmed by reports that many employers might drop their own retiree drug benefits if one is included in Medicare, the committee has agreed to subsidies and discussed giving tax credits to companies. "We'll do everything we can to encourage [them] to keep retirees in their own plans," Grassley says.
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