House, Senate Negotiators Expand Discussions on Final Medicare Bill, Reach No Agreements
Negotiators charged with reconciling the House and Senate Medicare bills (HR 1 and S 1) on Thursday expanded their discussions to include how to structure a new Medicare drug benefit, but they reached no new agreements, CongressDaily/AM reports. Senate Majority Leader Bill Frist (R-Tenn.) said that negotiators' staff members are "modeling several alternatives between the House and Senate plans" for the final drug benefit. Senate Finance Committee Chair Charles Grassley (R-Iowa) said that negotiators "made decisions on how to get a process to decide the benefit" (Rovner, CongressDaily/AM, 10/3). Under the House bill, beneficiaries would pay an estimated average $35 monthly premium and a $250 annual deductible for the drug benefit. The plan would cover 80% of beneficiaries' drug costs from $251 to $2,000 per year, after which there would be a gap in coverage before catastrophic coverage would take effect. The amount that a beneficiary would pay before qualifying for catastrophic coverage would be determined on a sliding scale based on income. For most beneficiaries, coverage would resume once they have purchased $4,900 worth of drugs in a year, which would result in beneficiaries spending $3,500 out of pocket. Under the Senate bill, beneficiaries would pay a $275 annual deductible and an estimated $35 average monthly premium for the drug coverage, which they could obtain by remaining in traditional Medicare and enrolling in a stand-alone private drug plan or by choosing a new coverage option called "Medicare Advantage." Either way, beneficiaries would pay half of their annual drug costs from $276 to $4,500 and all drug costs between $4,501 and approximately $5,800. After about $5,800, beneficiaries would be required to cover 10% of their drug costs, with Medicare paying the remainder (California Healthline, 7/1).
According to several negotiators, part of Thursday's meeting was devoted to "revisiting" a tentative agreement among some negotiators to allow people dually eligible for both Medicare and Medicaid to receive drug coverage through Medicare, CongressDaily/AM reports (CongressDaily/AM, 10/3). A core group of the negotiators on Wednesday announced they tentatively agreed to provide a Medicare drug benefit to so-called dual-eligibles. About 6.2 million people are enrolled in both Medicaid and Medicare, and another four million people are considered dually eligible but have not yet enrolled in both programs. Although states are not required to provide prescription drug benefits under Medicaid, all 50 states do so. Dual-eligibles make up 19% of all Medicaid beneficiaries, and states spend $7 billion per year to provide prescription drug coverage to such people (California Healthline, 10/2). CongressDaily/AM reports that negotiators have been discussing a "clawback" provision, under which states would still be partially responsible for the cost of drug coverage for dual-eligibles. However, Frist said negotiators were forced to move on to the design of the drug benefit because "everything we do on the benefit design affects what we can do [on] the low-income side." Negotiators are scheduled to meet again Friday morning, but the meeting schedule for next week remains unclear because the Senate is in recess.
In related news, a bipartisan group of senators on Thursday said a meeting with Frist and Grassley had eased their fears that a final Medicare bill would "til[t] too much" toward the House bill, CongressDaily/AM reports. The group, which includes Sens. Olympia Snowe (R-Maine) and Edward Kennedy (D-Mass.), has been asking for a provision in the final Medicare bill that would call for the federal government to administer the drug benefit in areas where fewer than two private plans choose to offer coverage. Such a provision is not in the House bill. The group also opposes a provision in the House bill that calls for direct competition among private plans and traditional, fee-for-service Medicare beginning in 2010. "[Frist and Grassley] fully understand what it will take to get a bill passed in the Senate," Snowe said (CongressDaily/AM, 10/3).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.