Cost of Medicare Reform Could Exceed Budget Resolution Guidelines
The estimated cost of reforming Medicare is becoming a hurdle for lawmakers attempting to do so while adding a prescription drug benefit to the program, while staying within the $400 billion over 10 years designated for the overhaul in the fiscal year 2004 budget proposals approved by the House and Senate, CongressDaily reports (Rovner, CongressDaily, 5/7). President Bush has proposed a Medicare reform framework that would offer prescription drug assistance in the traditional Medicare system through discount cards and some coverage for low-income beneficiaries and would include two other options to be offered through private insurers. A private system called "Enhanced Medicare" would provide beneficiaries with expanded prescription drug coverage, full coverage for preventive care and lower out-of-pocket costs for hospital stays. "Medicare Advantage" would be similar to the current Medicare+Choice program, which provides beneficiaries with a selection of private health plans with and without prescription drug coverage but no guaranteed drug benefit. House Speaker Dennis Hastert (R-Ill.) proposed a similar plan last week (California Healthline, 5/6). Jenny Hansen, an aide to Rep. Richard Burr (R-N.C.), said that a plan proposed by Burr and other House members has been estimated by the Congressional Budget Office to cost as much as $200 billion over the next decade. She added that legislators will have to "make some tough choices" between long-term reform, a drug benefit or increasing provider payments. Addressing a Banc of America Securities seminar yesterday, Colin Roskey, a member of the Senate Finance Committee majority staff, said that he expects any Medicare bill produced by Republicans would include increases in provider payments, particularly for rural doctors and hospitals, but that funding for the increases would not likely be able to come from the $400 billion lawmakers set aside for Medicare reform and the drug benefit (CongressDaily, 5/7).
In related news, a group of Republican lawmakers on the House Energy and Commerce Committee have developed a drug benefit proposal as an alternative to current proposals, CongressDaily/AM reports. Although the group, which includes Reps. Charlie Norwood (R-Ga.), Burr, John Shadegg (R-Ariz.), Joe Barton (R-Texas) and Steve Buyer (R-Ind.), has declined to discuss details of the proposal, sources have said the proposal is based on a drug "debit" card Medicare beneficiaries could use to purchase drugs, CongressDaily/AM reports. Under the plan, all beneficiaries would receive a card with a balance, likely about $1,000, to which they could add tax-deductible contributions of their own or from former employers. States also could contribute funds to low-income seniors. Funds would carry over from year to year, and beneficiaries' annual drug spending likely would be capped at about $5,000, CongressDaily/AM reports. Norwood said, "The fear is if you turn prescription drugs into a never-ending entitlement, 20-25 years down the road this thing is gong to be totally unsustainable by the federal government." The group is expected to brief House Republican leaders on the proposal today (Rovner, CongressDaily/AM, 5/8).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.