House Energy and Commerce Committee Passes GOP Medicare Prescription Drug Plan

The House Energy and Commerce Committee on Friday voted 30-23 along party lines to pass a $350 billion Medicare reform package that includes a prescription drug benefit for seniors, the New York Times reports (Pear, New York Times, 6/22). Republican leaders plan to bring the bill to the floor this week, but before that can happen, the legislation must be reconciled with a version of the bill passed earlier last week by the House Ways and Means Committee (Goldstein, Washington Post, 6/22). As approved by the Energy and Commerce Committee, the bill would allow Medicare beneficiaries to purchase drug coverage directly from private insurance companies. Seniors would pay a $250 annual deductible and a $35 monthly premium. Low-income seniors would be exempt from the premiums and deductible. The government would cover 80% of seniors' annual prescription drug costs up to $1,000, 50% up to $2,000 and no costs between $2,000 and $3,700, after which a catastrophic benefit would begin. The bill approved by the Ways and Means Committee would cap out-of-pocket costs at $3,800 (Fulton, CongressDaily, 6/21). The original cap on out-of-pocket costs was set at $4,500 (California Healthline, 6/20).

The Energy and Commerce panel's bill also includes is a provision that would allow drug plans to negotiate discounts with pharmaceutical companies greater than the price breaks Medicaid programs receive. The committee dropped a provision from the bill that would have charged Medicare beneficiaries a $40 copayment for home health services. The bill also includes increased payments to hospitals, physicians and Medicare+Choice plans. Both bills would loosen regulations on certain Medicare providers and would enact a prescription drug discount card program proposed by President Bush (Washington Post, 6/22). Republican leaders plan to pass the bill by the July 4th recess, but one Energy and Commerce Committee member said work on the fiscal year 2003 appropriation bills could put off the vote until after the holiday (CongressDaily, 6/21). Approving the bill puts "a lot of pressure on the Senate to pass a bill and meet [the House] in conference," Rep. Bill Tauzin (R-La.) said. Senate Majority Leader Tom Daschle said the Senate would vote on legislation that would offer seniors "more generous benefits" next month.

The New York Times reports the vote is a "political victory" for Republicans, who are attempting to position themselves as "protectors of the elderly" in anticipation of the November elections. However, House Democrats have called the legislation "inadequate," the Times reports (New York Times, 6/22). House Democrats' plan, which would cost between $750 billion and $800 billion over 10 years, would cover 80% of seniors' annual drug costs up to $2,000 and 100% above that figure. Seniors would pay a $100 annual deductible and a $25 monthly premium (California Healthline, 6/19). Democrats oppose the Republicans' plan because it would rely on private insurers and say the bill is the "first step in a Republican plan to privatize Medicare." Democrats also object that while the GOP bill defines standard coverage, it would allow insurers to alter premiums and other coverage details. According to Democrats, drug coverage should be standard for seniors and not "subject to the vagaries of the private market." Rep. John Dingell (D-Mich.) said, "I seriously doubt that this bill will ever become law in its present form," adding, "A major purpose of this whole exercise was for Republicans to ensure that they'll have political protection" for the November election (New York Times, 6/22). Dingell called on President Bush to "reject" the GOP plan, saying it offers "phantom drug benefits" (Miller, AP/Nando Times, 6/22).

Some Republicans also are "questioning the plan," the AP/Baltimore Sun reports. Rep. Donald Manzullo (R-Ill.) said in a letter to Republicans that the bill would hurt small pharmacies because private insurers would push seniors toward mail-order pharmacies or large chain drugstores. "Congress must not enact legislation [that] harms these small businesses in the name of providing a prescription drug benefit," he wrote. Rep. Mac Collins (R-Ga.) -- the lone Republican on the Ways and Means Committee to vote against the plan -- said the bill "costs too much." Collins favors legislation that would assist seniors who currently have no access to prescription drugs, instead of a universal benefit (AP/Baltimore Sun, 6/23).

NBC's "Meet the Press" on Sunday included an interview with House Speaker Dennis Hastert (R-Ill.) about the Republicans' Medicare package. A transcript of the program is available online (Russert, "Meet the Press," NBC, 6/23). On Saturday, Hastert also appeared on CNN's "Novak, Hunt & Shields" to discuss the package. A transcript of the program is available online (Novak, "Novak, Hunt & Shields," CNN, 6/22).