Legislative Update Week of June 2, 2003

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Legislative Update Week of June 2, 2003

It was announced this week that leaders of the Senate Finance Committee, which has primary jurisdiction over Social Security and Medicare, have reached an agreement on an outline for a prescription drug benefit.

The proposal, as outlined in the June 6, 2003 issue of CQ Today, would provide a drug benefit plan while allowing seniors the option of either staying in traditional Medicare fee-for-service or enroll in a private plan. Although details of the costs may change, it is expected that seniors would be required to pay a deductible of about $275 yearly, as well as a monthly premium of about $35. In return for the deductible and monthly premium, seniors would have one-half of their prescription drug costs, up to $3,450, covered. For expenses in the $3,450 to $5,300 bracket, seniors would have to pay the entire cost. Above that $5,300 mark, seniors would have 90 percent of their drug costs taken care of by the government as part of a “catastrophic” provision.

Many individuals and organizations, including TSCL, were concerned about other plans that included strong incentives to leave Medicare fee-for-service and sign up for private plans in order to receive prescription drug coverage. The recently reached Senate compromise seems to address those concerns. Another issue of concern was the potential lack of availability of private plans and real options to some seniors, especially those in rural areas. Once again, the Senate plan seems to address that point, and stipulates that every senior would be able to choose between at least two plans that include coverage - either directly through private companies or a government fallback plan as one of the options.

Concerns that have raised by some include the margin between initial coverage (up to the $3,450) and the catastrophic coverage that “kicks in” at $5,300, and by others who say the subsidy is too generous and could lead to seniors taking too many prescription drugs.

In addition to the prescription drug proposal, a plan for bringing generic drugs to market sooner was announced by a bipartisan group of Senators. This proposal builds on one that passed the Senate last year.

As the TSCL legislative team continues to learn more about the prescription drug plan, we encourage our members to share with us their thoughts about the Senate proposal: do you think the plan will be beneficial to you?

Sources:
“Medicare Bill Inspires High Hopes Despite Deep Divide,” CQ Today, June 6, 2003
“Generic-Drug Bill Compromise Could Hold Down the Cost of Medicare Drug Bill,” CQ Today, June 6, 2003
“Bipartisan Deal on Drug Coverage,” The New York Times, June 6, 2003
“Senators Reach Deal on Medicare: Plan Calls for Same Drug Benefits Despite Provider,” Washington Post, June 6, 2003

June 2003