Senate Rejects GOP-Sponsored Plan To Offer Discount Rx Cards to Medicare Beneficiaries
One day after rejecting competing proposals to add a prescription drug benefit to Medicare, the Senate yesterday defeated a Republican-backed proposal to create a prescription drug discount card for Medicare beneficiaries, the New York Times reports. Sponsored by Sens. Chuck Hagel (R-Neb.) and John Ensign (R-Nev.), the measure received more support than expected but failed by a vote of 51-48, short of the 60 votes needed for passage under Senate budget rules (Pear, New York Times, 7/25). The proposal would have established a 10-year, $160 billion national prescription drug card program designed to lower drug prices through a bulk-rate pooling program. Pharmacy benefit managers would administer the benefit, and Medicare would have endorsed and promoted the program. Seniors would not pay any premiums but would be responsible for a one-time $25 fee -- which would be waived for seniors earning less than 200% of the federal poverty level -- to have access to the discounted drugs. Once they reached an out-of-pocket limit that varies by income, seniors would pay only a small copayment. Seniors earning less than $17,720 would not pay more than $1,500 a year for drugs. The drug payment cap would be set at $3,500 annually for seniors earning between $17,721 and $35,440 per year. Seniors with annual incomes between $35,441 and $53,160 would pay no more than $5,500, while those earning more than $53,160 would spend no more than 20% of their income on drugs (California Healthline, 7/24).
Democratic senators and AARP said the program's benefits were "inadequate," the Times reports (New York Times, 7/25). Sen. Edward Kennedy said the plan offered "little more than 'crumbs'" because seniors would need to reach an out-of-pocket limit before receiving assistance (Dewar, Washington Post, 7/25). Hagel and Ensign, however, said the plan was affordable, easy to implement and would have protected seniors from catastrophic costs. Ensign also noted that the plan would have provided seniors with incentives to question physicians about the need for a drug and to shop for cheaper treatments. Ensign said, "Let's keep the patient accountable; let's keep the senior citizen accountable" (Kenen, Reuters/Detroit Free Press, 7/25).
Despite the rejection of the Hagel-Ensign plan, providing assistance to low-income seniors and those with high drug costs is emerging as the Democrats' "favored basis for a compromise," the Post reports (Washington Post, 7/25). At a Democratic caucus meeting last night, Sens. Blanche Lincoln (D-Ark.) and Jeff Bingaman (D-N.M.) proposed a $400 billion plan that would cover all drug costs for seniors earning less than 200% of the federal poverty level. Under the proposal, Medicare also would cover all drug costs above $4,000 a year for all seniors, regardless of income. Lincoln said that the plan was an attempt to win Republican support by cutting the cost of the package proposed by Sens. Bob Graham (D-Fla.) and Zell Miller (D-Ga.), which would have established a Medicare prescription drug benefit at an estimated cost of $594 billion over seven years. Many Democrats said they would consider the Lincoln-Bingaman plan if a more comprehensive package was not feasible, but some raised concerns about applying an income qualification to Medicare for the first time, CongressDaily/AM reports (Fulton/Rovner, CongressDaily/AM, 7/25). Senate Majority Leader Tom Daschle (D-S.D.) said, "I think it's fair to say that we are unlikely to get as robust a drug benefit plan as many of us would envision, but we've got to begin somewhere. I'm willing to accept a beginning, but it has to be a good beginning" (Washington Post, 7/25).
Meanwhile, closed-door Senate Finance Committee negotiations continued on a plan to combine the Graham-Miller and tripartisan proposals, which the Senate rejected on Tuesday (CongressDaily/AM, 7/25). Under the possible compromise, proposed by Finance Committee Chair Max Baucus (D-Mont.), Medicare would start providing drug coverage in 2005 and when private insurers and health plans would begin to contract with the government to offer the benefit in future years, which would require them to provide benefit packages similar to those proposed in the Democratic plan. Insurers would slowly assume the financial risk of providing coverage, but the government would limit their potential losses and profits. Medicare would deliver the benefit in areas where private insurers do not (New York Times, 7/25). A Democratic aide said that lawmakers would study 10-year benefit packages of $350 billion, $400 billion and $450 billion (CongressDaily/AM, 7/25). Several Democratic senators said they did not anticipate much support from their colleagues for a plan that would allow private insurers to provide a Medicare benefit. A negotiation session on the Baucus proposal is scheduled for today (Washington Post, 7/25).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.