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Legislative Update: House Prescription Bill Raises Questions Senate Proposes Compromise With Trade-offs By Michael Ouellette, Legislative Director, TREA Senior Citizens League With just a few working days left in the legislative calendar, Congress is moving closer to adding prescription drug benefits to Medicare, but it remains unclear that a workable solution will be reached before Congress adjourns. In June the House passed by just 3 votes a plan that would rely on private insurance companies to sell "drug only" insurance policies to seniors. The insurance companies would be backed by government subsides. The big question is whether insurance companies could be relied on to provide the coverage. At the same time the bill was passed, many private insurance companies announced that they are withdrawing from Medicare. Approximately 934,000 beneficiaries are affected by their Health Maintenance Organizations withdrawing from the program. The insurance industry has testified that they did not believe the "drug only" policies would be affordable and may not offer the policies at all. Several weeks after passage of the House bill, the Senate released details of their version of a prescription drug bill. Breaking with House Republicans, the chairman of the Senate Finance Committee, William Roth (R-DL), proposed a government-administered program that would offer drug benefits to all Medicare recipients. Under the Roth plan, seniors would be offered two options. They could stay in the original fee-for-service program with the existing benefits, premiums, deductibles and co-payments, or they could enroll in a high-option plan. The high-option plan would provide drug benefits and enhanced inpatient hospital benefits; 365 full paid coverage days per year after the deductible. Low income beneficiaries would be eligible for most of their costs paid for by the government. There would trade-offs. The plan would charge more for certain services like laboratory tests and home health care. Under the high-option Medicare plan, the government would establish a single deductible for Medicare Part A and B (hospital and doctor's insurance). The program now has separate deductibles of $776 for inpatient hospital care and $100 for doctors' services. In addition, there would be a separate deductible for drug insurance. This would likely create higher out-of-pocket costs for the 80% Medicare recipients who do not need hospital care in a given year. As of this writing, the Senate has yet to act on the legislation, and TSCL is still reviewing the bill. Preliminary details, however, indicate that the plan could become the basis for a compromise. TSCL believes that all beneficiaries should have the option to voluntary affordable prescription drug coverage through the Medicare program and this bill represents a step in the right direction. Please contact your Senators and urge them to add affordable and realistic prescription drug coverage to Medicare before the end of this legislative session! This article first appeared in Volume 5, Issue 9 of "The Social Security and Medicare Advisor" newsletter (September/2000). To receive future editions of "The Advisor" in its special, free e-mail version, please click here. | ||||||||
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