House This Week Expected To Pass Bill To Protect Federal Retiree Prescription Drug Coverage
The House this week is expected to pass a bill (HR 2631) that would guarantee that drug benefits for retired civilian federal workers be "at least equal to" the value of drug coverage offered to active federal workers under the Federal Employees Health Benefit Program and could not be reduced to the level proposed under pending Medicare bills (HR 1 and S 1), the New York Times reports. Rep. Tom Davis (R-Va.) introduced the bill late last month, and Sen. Daniel Akaka (D-Hawaii) introduced a similar measure (S 1369) in the Senate (Pear, New York Times, 7/8). Through FEHBP, federal employees have access to a variety of health plans, with varying coverage levels and out-of-pocket costs. The most popular health plan under FEHBP, a Blue Cross Blue Shield policy, currently covers about 80% of federal employees' total prescription drug costs, according to Kenneth Thorpe, chair of the health policy department at Emory University's Rollins School of Public Health. In comparison, the Senate Medicare bill would cover about 49% of beneficiaries' total medication costs, and the House bill would cover 55% of beneficiaries' costs, Thorpe said (California Healthline, 7/7). Davis said that the federal government should "set an example" for private employers to discourage them from ending retiree drug benefits should Congress pass a Medicare drug benefit. The Congressional Budget Office has estimated that more than one-third of all retirees who have drug coverage through their former employers would lose that coverage as a result of a Medicare drug benefit, according to the Times. The House is expected to debate the Davis bill today under a procedure that allows 40 minutes of debate, no amendments and a two-thirds vote for passage (New York Times, 7/8). The Senate's Medicare bill includes a provision by Sen. Mark Dayton (D-Minn.) that would make prescription drug coverage for members of Congress equal to whatever level lawmakers approve for Medicare beneficiaries. Roll Call earlier reported that the amendment was a "symbolic vote that would be overturned in negotiations with the House" (California Healthline, 7/7).
Some Democrats say the Davis and Akaka bills are "evidence of hypocrisy" by President Bush and some other Republicans, who they say have given their support to proposed Medicare drug coverage that is "so inadequate" that they are forced to protect coverage for members of Congress, the Times reports. Earlier this year, Bush said, "If [a drug benefit] is good enough for Congress, it's good enough for the senior citizens of America." Rep. Sherrod Brown (D-Ohio) said, "Republicans tell seniors they will have the same benefits as members of Congress and other federal employees. But they tell federal retirees, 'We won't put you into this inferior Republican Medicare plan.'" However, the Times reports that House Republican leaders do not consider the bill controversial. Scott Kopple, a spokesperson for Davis, said, "There was concern that Congress or the U.S. Office of Personnel Management would attempt to save money in a future budget cycle by reducing retiree drug benefits, under the assumption that retirees could simply go into the Medicare program." He added, "This is not about members of Congress protecting their own interests. It's about protecting the interests of retirees." Akaka said, "[Federal retirees] should not face a situation in which they must rely on Medicare." Daniel Adcock, assistant legislative director of the National Association of Retired Federal Employees, said, "Our members fear that the government will be tempted to reduce or eliminate drug coverage for federal retirees, in favor of a Medicare plan that would be inferior and more complex." But Adcock added, "The bottom line is that [the federal retiree drug benefit] is an earned benefit -- deferred compensation, no different from retirement income. Federal employees generally don't earn as much as private sector workers, but they make that sacrifice for the peace of mind of knowing they will have health coverage in retirement" (New York Times, 7/8).
In related news, Senate Republican leaders yesterday selected members for the upcoming conference committee tasked with reconciling the House and Senate versions of Medicare reform legislation, CongressDaily/AM reports. Senate Majority Leader Bill Frist (R-Tenn.), Minority Leader Tom Daschle (D-S.D.), Finance Committee Chair Charles Grassley (R-Iowa), Finance Committee ranking member Max Baucus (D-Mont.), Judiciary Committee Chair Orrin Hatch (R-Utah), Budget Committee Chair Don Nickles (R-Okla.) and Sens. Jon Kyl (R-Ariz.), Jay Rockefeller (D-W.Va.) and John Breaux (D-La.) will be on the committee. House conferees are expected to be named within the next few days, according to CongressDaily/AM (CongressDaily/AM, 7/8). According to CongressDaily, House Speaker Dennis Hastert (R-Ill.), Ways and Means Committee Chair Bill Thomas (R-Calif.) and Energy and Commerce Committee Chair Billy Tauzin (R-La.) likely will be named to the conference committee (Heil, CongressDaily, 7/7).
The conference committee will work to reconcile the separate House and Senate Medicare bills. Under both bills, seniors would have access to a stand-alone drug benefit regardless if they are enrolled in traditional Medicare or in a private plan. The Senate bill calls for the federal government to provide a drug benefit through a contractor only in areas in which private drug-only health plans decide not to participate. Under the House bill, beneficiaries would pay an estimated average $35 monthly premium and a $250 annual deductible for drug coverage. 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. Individual beneficiaries with annual incomes of $60,000 or more would have to pay more before catastrophic coverage began. Under the Senate bill, beneficiaries would pay a $275 annual deductible and an estimated $35 average monthly premium for the drug coverage. They 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. Both bills would provide greater subsidies to low-income beneficiaries, although the approaches differ. Both bills would also create a drug discount card beginning in 2004 that could provide discounts of between 15% and 25%.
The House bill would raise the deductible beneficiaries pay for physician services and would include new preventive care coverage options, such as a free physical for each beneficiary. The House measure also would establish direct price competition between traditional Medicare and private health plans beginning in 2010. The Senate bill would create a new coverage option called "Medicare Advantage," under which private plans would offer coverage for catastrophic health expenses and preventive care services in addition to the required Medicare benefits, giving beneficiaries an incentive to move out of traditional Medicare and into a private plan. The Senate bill also calls for spending $12 billion over 10 years for two five-year demonstration projects. One would implement a new competitive bidding payment system for private plans in certain regions, and the other would pay for preventive and chronic care services under traditional fee-for-service Medicare (California Healthline, 7/7).
NPR's "Morning Edition" today reports on congressional efforts to reconcile the House and Senate Medicare reform bills. The segment includes comments from Reps. Nancy Johnson (R-Conn.) and Pete Stark (D-Calif.), Sen. Dianne Feinstein (D-Calif.) and former CMS Administrator Gail Wilensky (Rovner, "Morning Edition," NPR, 7/8). The segment is available online in RealPlayer.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.