House Committees Approve GOP-Backed Legislation

With an eye toward the November elections, both Democrats and Republicans have introduced Medicare prescription drug proposals. Despite the shared goal of wooing senior voters, the substance of the competing plans is far apart. Prepared to spend more on their plans than Republicans, Democrats have been labeled fiscally irresponsible by their counterparts. Democrats respond that their plans – House and Senate Democrats have offered two different proposals – are more affordable for seniors, and have criticized the Republican package for requiring patients to buy drugs directly from private companies. Under the Democratic plans, the drug benefit would be run through the existing Medicare program.

GOP-backed legislation (HR 4954) approved by the House Ways and Means and Energy and Commerce Committees would provide $350 billion over 10 years to establish a Medicare prescription drug program. Under the plan, Medicare patients would pay an annual $250 deductible, and a monthly premium of about $35. The plan would also require patients to pay 20 percent of the cost of prescriptions up to a $1,000 limit, and 50 percent of the next $1,000. Patients would pay all drug costs between $2,001 and $3,800; insurance plans would pick up the tab for expenses beyond that. The nation’s largest seniors group, the AARP, has criticized the GOP bill for leaving gaps in coverage.

Republicans were also harshly criticized by foes for hosting a June 19 fundraiser attended by many pharmaceutical companies (the Energy and Commerce mark up was temporarily postponed so GOP lawmakers could attend the event). Pharmaceutical companies – many of which contributed $250,000 to attend the fundraiser – have endorsed the Republican prescription drug plan.

Attempts by Democrats in both committees to push a ten-year, $800 billion alternative plan failed. Under the Democratic alternative, Medicare participants would pay a $25 monthly premium, a $100 deductible, and 20 percent of the cost of prescriptions up to $2,000. Medicare would cover all prescription drug costs beyond that.

The Ways and Means Committee passed its bill on June 19 on a party-line vote. On June 21, the Energy and Commerce Committee approved its measure, also along party lines. The bills will be merged in the Rules Committee and will likely move to the House floor for a vote next week.

Senate Democrats have unveiled a plan of their own. On June 14, Senators Bob Graham (FL), Edward Kennedy (MA), and Zell Miller (GA) introduced the Medicare Outpatient Prescription Drug Act of 2002 (S 2625), a $450 billion plan. Under the bill, seniors would pay a $25 monthly premium, but no deductible. Co-payments for prescriptions would range from $10 for generic drugs to $60 for brand names. Medicare would cover all costs above $4,000. Senate Majority Leader Tom Daschle (D-SD) has indicated that he would like to bring the bill to the Senate floor for a vote before Congress adjourns for its August recess.

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