Talks Continue as Senate Kills Two Medicare Prescription Drug Benefit Plans
As expected, the Senate yesterday rejected competing Democratic- and tripartisan-backed proposals to add a prescription drug benefit to Medicare, leading to "more doubt" that any such legislation will be enacted this session, the Wall Street Journal reports. Under Senate budget rules, the plans needed 60 votes to pass because both exceeded the amount of money appropriated for them in this year's fiscal budget. In nearly party-line votes, the Democratic plan fell eight votes short with a vote of 52-47, while the tripartisan plan was defeated in a 51-48 vote (Lueck, Wall Street Journal, 7/24). One Republican, Sen. Peter Fitzgerald (Ill.), voted for the Democratic plan, while the two Democratic senators from Louisiana, John Breaux and Mary Landrieu, voted for the tripartisan plan. Sen. James Jeffords (I-Vt.) voted for both plans. Sponsored by Sens. Bob Graham (D-Fla.) and Zell Miller (D-Ga.), the Democratic plan would have established a Medicare prescription drug benefit at an estimated cost of $594 billion over seven years (Pear, New York Times, 7/24).
Under the Democratic legislation, seniors would pay a $25 monthly premium with no deductible, a $10 copayment for generic drugs and a $40 or $60 copayment for brand-name treatments. The government would cover 100% of seniors' annual out-of-pocket prescription drug costs that exceed $4,000. Low-income seniors would pay reduced premiums, and the bill would exempt Medicare beneficiaries with annual incomes less than 135% of the federal poverty level from premiums and copayments. Republicans mostly backed a proposal from a tripartisan group, which includes Sens. Charles Grassley (R- Iowa), Olympia Snowe (R-Maine), Orrin Hatch (R-Utah), Breaux and Jeffords. That group had proposed a $370 billion, 10-year bill under which Medicare beneficiaries would pay an estimated $24 monthly premium in the first year. After meeting a $250 annual deductible, the government would cover 50% of beneficiaries' total annual prescription drug costs up to $3,450 (or $1,850 total out-of-pocket), and then 90% of their drug costs once out-of-pocket drug spending exceeded $3,700. Beneficiaries with incomes up to 150% of poverty who meet resource requirements would receive premium and cost-sharing assistance (California Healthline, 7/23).
After the Senate rejected the two plans, the Democratic leadership began "scrambl[ing]" to draft a compromise plan to avoid "a politically damaging deadlock," the Washington Post reports (Goldstein/Dewar, Washington Post, 7/24). Senate Finance Committee Chair Max Baucus (D-Mont.) met with Senate Majority Leader Tom Daschle (D-S.D.), Sen. Edward Kennedy (D-Mass.), Breaux, Graham, Miller and Jeffords to attempt to merge the competing proposals (Rovner/Fulton, CongressDaily/AM, 7/24). After the two hour meeting, a Democratic aide said the "leading option" is a plan that would allow private insurers to offer drug coverage but would require them to provide benefit packages similar to those proposed in the Democratic plan. If private insurers do not offer the benefit, Medicare would "step in." The aide also said the senators are considering a compromise on the lifetime cost of a drug benefit at between $450 billion and $500 billion (Washington Post, 7/24). Lawmakers said that because of the philosophical differences over how to deliver a drug benefit, it may be easier to reach a consensus on cost (Hook, Los Angeles Times, 7/24). But Daschle said a compromise on the benefit is "closer than most people think" (Fagan, Washington Times, 7/24). However, Senate Minority Leader Trent Lott (R-Miss.) said it is doubtful the two bills can be blended because "most Republicans will not agree to spend as much as Democrats want" (Washington Times, 7/24). White House spokesperson Ari Fleischer said President Bush still considers a Medicare prescription drug benefit to be a "top priority" that should be enacted this year (Hotakainen/Kantor, Minneapolis Star Tribune, 7/24).
The Senate is under pressure to "match" the House, which passed a drug benefit plan last month. In addition, "voters' impatience" over the Senate's inability to pass a bill could hasten a compromise, the Philadelphia Inquirer reports, (Davies, Philadelphia Inquirer, 7/24). Polls show the issue is a "top concern" for seniors and women, "two of the groups most likely" to vote this November (Kirchhoff, Boston Globe, 7/24). "The pressure is increasing on us," Breaux said. "We can't give seniors excuses; they can't take excuses to the drugstore," he added (Philadelphia Inquirer, 7/24). But the political costs of a compromise may be too high for both Republicans and Democrats, the Baltimore Sun reports. Ron Pollack, executive director of Families USA, said, "The differences between the Democratic and Republican approaches are so substantial that it's very hard to bridge those differences in an election year." While Democrats say they have an advantage on the prescription drug issue because voters "traditionally trust them to protect government benefits," Republicans say that their strategy of going "head to head" with Democrats has proven effective. "If it's health care, and we're not getting completely killed, we're winning," a senior Senate Republican aide said (Hirschfeld Davis, Baltimore Sun, 7/24).
Following yesterday's votes on the competing Medicare prescription drug measures, the Senate began consideration of a proposal to create a prescription drug discount card. Sponsored by Sens. Chuck Hagel (R-Neb.) and John Ensign (R-Nev.), the plan is similar to one proposed last summer by President Bush. The Senate is scheduled to vote on the plan today, but it is not expected to win the 60 votes needed for passage (CongressDaily/AM, 7/24). Hagel and Ensign's plan would establish a 10-year, $160 billion national prescription drug card program designed to lower drug prices through a "bulk-rate" pooling program. Medicare would not manage the benefit but would endorse and promote it. In addition, pharmacy benefit managers would administer 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 pre 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, 7/16).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.