Sen. Frist Asks Medicare Conferees To Consider Proposals To Protect Retiree Prescription Drug Coverage

Senate Majority Leader Bill Frist (R-Tenn.) on Thursday urged negotiators attempting to reconcile the House and Senate Medicare bills (HR 1 and S 1) to try to find ways to keep companies that offer retiree drug benefits from cutting those benefits if Congress passes a prescription drug benefit under Medicare, the New Orleans Times-Picayune reports (Walsh, New Orleans Times-Picayune, 10/10). The Congressional Budget Office has estimated that as many as 33% of beneficiaries who have such benefits would lose that coverage if a Medicare drug benefit is enacted. According to the CBO, many employers "would see enactment of a Medicare drug benefit as an opportunity to reduce the costs and risks of providing drug coverage" to retirees (California Healthline, 9/16). In a conference call Thursday, Frist urged conferees to return to negotiations next week with ideas on how to prevent employers from cutting their retiree drug coverage. According to the Times-Picayune, the House and Senate Medicare bills include a number of provisions that would encourage employers to offer or continue retiree health benefits.

Frist's request coincides with a new study published on the Heritage Foundation Web site that predicts that more than four million Medicare beneficiaries who currently receive employer-sponsored retiree drug benefits would lose some or all of that coverage under a Medicare prescription drug benefit, the Times-Picayune reports. Study author Ken Thorpe of Emory University, a former Clinton administration health adviser, said that an estimated one-third of Medicare beneficiaries with retiree drug benefits would lose that coverage. However, Ken Johnson, a spokesperson for Rep. Billy Tauzin (R-La.), one of the Medicare conferees, said, "There will be some loss of [retiree drug] coverage, no doubt about it. ... But the (Thorpe) numbers are unrealistically high. Most employers are [offering drug benefits] to take care of their workers. We want to help them do that" (New Orleans Times-Picayune, 10/10). The study is available online. Note: You must have Adobe Acrobat Reader in order to view this report.

Responding to a New York Times editorial Tuesday that supported proposals to introduce income-related premiums into Medicare, former CMS -- then HCFA -- Administrator Bruce Vladeck, who also served on the National Bipartisan Commission on the Future of Medicare, writes that not only should affluent seniors pay a larger share of Medicare costs, but they -- as well as those who are not seniors -- should also pay a larger share of the cost of programs such as Head Start, food stamps and national defense. He concludes, "Refusal to acknowledge that an income-related premium is in fact a surtax on one group only reinforces the continuing erosion of the principle that vital public services are a social responsibility for which every citizen should bear a fair share" (Vladeck, New York Times, 10/10).