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Prescription Drug Medicare Reform Plan Debated Forming the basis of the prescription drug debate in Congress is a plan introduced by Senators John Breaux (D-LA) and Bill Frist (R-TN), “The Medicare Preservation and Improvement Act of 1999.” Unlike President Clinton’s prescription drug proposal which would simply add the option to buy additional prescription drug coverage to Medicare, the Breaux/Frist plan goes much further to ensure financing for the new benefit, by restructuring Medicare. Under the Breaux/Frist proposal, Medicare recipients could choose from competing health plans to obtain their health services. Recipients would have the option of selecting a basic health plan that covers current Medicare benefits, or a “high option” plan that also includes coverage for prescription drugs and a stop-loss benefit for those with very high medical bills. In addition to competing private standard and high option plans, there would also be a Health Care Financing Administration (HCFA)-sponsored standard (like traditional Medicare) and a HCFA-sponsored high option plan. This would allow Medicare recipients who wished, to remain in traditional Medicare. Low income seniors under 135% of poverty would get full federal funding for the lowest-cost high option plan in their area. Other low-income seniors would get a sliding scale subsidy for drug benefits. The program is modeled after the Federal Employees Health Benefits Program and is also called a premium-support program. Under the Breaux-Frist proposal each health care plan, including traditional fee-for-service Medicare, determines its own premium. The percentage of the premium paid by the beneficiary is set through a formula that compares a plan’s premium with a national average of all plan premiums. Beneficiaries who join relatively inexpensive plans would pay little or nothing. Those who join relatively expensive plans pay more. Those supporting the plan believe it would slow the growth of Medicare spending. The costs for the federal employees program are growing about 1% more slowly per year than Medicare.
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