Medicare Drug Efforts Stall

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Medicare Drug Efforts Stall

Efforts to pass a Medicare prescription drug plan may be in peril. Democrats and many Republicans in Congress complain that the $300 billion budgeted over 10 years for adding a prescription drug benefit to Medicare would only cover a small portion of drug costs. Because Medicare Part B (doctor`s insurance) costs currently exceed what the program takes in, many lawmakers are balking at adding the costly new benefit without changes to cut costs in other parts of the program.

The White House and Republicans are focusing on Medicare Reform legislation introduced by Senators John Breaux (D-LA) and Bill Frist (R-TN) as a starting point for negotiations. The Breaux-Frist bill would restructure Medicare on a premium support model. A new agency would be created to oversee Medicare and encourage competition between private health plans and traditional Medicare.

Medicare recipients would get at least the same benefits as they do now and health plans would be required to offer a voluntary prescription drug option that is estimated to cut the cost of a $100 prescription to as little as $35.

There are also some concerns that seniors could lose some of the prescription drug coverage they already get from retirement or state plans if Medicare starts paying the costs. About 20% of companies that currently offer a prescription drug benefit to retirees say they may stop if Medicare offered coverage. Seniors with prescription drug coverage may pay as little as $5 for generic medicines and $10 to $14 for brand name.

Source: `U.S. Senators Say Prescription Drug Bill In Peril,` Adam Entous, Reuters, April 24, 2001. `Plan Might Nix Other Drug Benefits,` Anjetta McQueen, The Associated Press, April 25, 2001.

To read a related story on our website, click on the headline below:

`Medicare Drug Plan Gains Support`

This article first appeared in Volume 6, Issue 8 of "The Social Security and Medicare Advisor" newsletter (July/August/2001). To receive future editions of "The Advisor" in its special, free e-mail version, please click here.