Archive for Thursday, November 13, 2003

Congress settling prescription drug benefit for seniors

November 13, 2003


— The fate of a federal prescription-drug benefit for seniors, a priority for both Democrats and Republicans in Congress, could ultimately depend on whether a fragile deal struck Wednesday holds up long enough to reach the House of Representatives and Senate for final approval.

"We're right on the goal line," said Tommy Thompson, President Bush's secretary of Health and Human Services.

The deal, approved by House Speaker Dennis Hastert, R-Ill., and Senate Majority Leader Bill Frist, R-Tenn., aims to end an ideological dispute about how much to let private health plans compete with Medicare. The dispute has bedeviled negotiators trying to reconcile differences in bills passed earlier by the House and the Senate. Medicare is a federal health insurance program for senior citizens and the disabled.

The leaders' compromise did not play well with key Democratic and Republican lawmakers. Sen. Don Nickles, R-Okla., one of the negotiators, said he might vote against it. The chief House negotiator, Republican Rep. Bill Thomas, was still meeting with other negotiators late Wednesday. Sen. Edward Kennedy of Massachusetts, an influential Democrat on health care issues, said the new plan was unacceptable.

The compromise legislation would guarantee prescription-drug coverage for Medicare recipients at a cost of $400 billion in the next 10 years. If passed, it would be the biggest expansion of Medicare since its creation in 1965.

Until now, negotiators have been unable to find common ground on an issue that has nothing to do with prescription drugs, but which both sides say could determine the destiny of Medicare itself. At issue is whether traditional Medicare should be allowed to compete with private health plans. Republicans say that would reduce Medicare costs and protect the system for years to come. Democrats say such competition would leave only the sickest seniors in traditional Medicare, driving up their premiums and ultimately leading to the federal program's demise.

Pilot program

Frist and Hastert, meeting with moderate Democratic Sens. John Breaux of Louisiana and Max Baucus of Montana, proposed setting up competition pilot-program tests in four metropolitan areas and one of 11 large regions. The experiment would last three years and could be extended for three more at the discretion of the Secretary of Health and Human Services.

Breaux and Baucus presented the plan to Senate Democrats during a closed lunch on Wednesday. Sen. Ben Nelson, a moderate Democrat from Nebraska, said the reaction was "mixed but hopeful." Some senators worried that states and metropolitan areas would be forced to participate in the competition experiment. Typically, when legislation calls for a demonstration project, states or communities apply to be part of it.

Perks for employers

The tentative agreement also would set aside about $16 billion as enticements for employers who already provide health benefits and prescription drugs for retirees. Lawmakers and health-care experts fear corporations might drop many seniors from their plans if a federal benefit takes effect.

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