Hurdles to Medicare Drug Benefit Include Structure, Administration, CQ’s Goldreich Says

Whether seniors receive any assistance with their prescription medications this year depends on if Republicans and Democrats "want to work together on a solution rather than passing legislation simply to have a campaign issue," Congressional Quarterly senior reporter Samuel Goldreich says in this week's "Congressional Quarterly Audio Report." Last week, the House approved a GOP-backed $350 billion, 10-year Medicare bill (HR 4954) that would allow Medicare beneficiaries to sign up in one of several drug-only insurance policies (Goldreich, "Congressional Quarterly Audio Report," 7/1). The plans would offer seniors coverage for 80% of their annual prescription drug costs up to $1,000, 50% up to $2,000 and no coverage between $2,000 and $3,700, after which a catastrophic benefit would begin. Seniors would pay a $250 annual deductible with a $33 monthly premium. Low-income seniors would be exempt from that cost-sharing (Kaiser Daily Health Policy Report, 6/28). In the Senate, Democratic and Republican members of the Finance Committee, along with Independent Sen. Jim Jeffords (Vt.), are working toward a July 15 deadline set by Majority Leader Tom Daschle (D-S.D.) to finish a competing bill. Even though Daschle has said he would bring the bill straight to the floor, he "doesn't have the 60 votes needed to avoid a filibuster and force a vote," Goldreich notes. He adds that similar to debates in the House, Senate Finance Committee members are haggling over whether the drug benefit should be market-based, as GOP members advocate, or administered through Medicare, as Democrats suggest. He adds that a compromise could be offering seniors private drug plans as an alternative to a standard drug plan run by Medicare.

More Drugs
Besides a Medicare drug benefit, Democrats are considering legislation to address "soaring prescription drug spending," Goldreich says, adding that current proposals include limiting the tax deductions drug companies can take for advertising and marketing costs; allowing U.S. residents to reimport U.S.-made medications from abroad; and tightening patent laws to ensure easier market access for generic medications. He adds that a limit on tax deductions is unlikely to go anywhere because Republicans oppose "the idea of limiting drug makers' free speech rights." Further, while the House and Senate could approve reimportation legislation, President Bush is unlikely to sign the measure into law because the administration maintains there is no way to guarantee the safety of imported drugs. Goldreich predicts that legislation addressing drug patent laws "will be a major battle that could gain some momentum."

The Uninsured
Congressional members also could address the uninsured after the weeklong July 4 recess, Goldreich says. In what is likely to be the "only movement on the uninsured this year," House and Senate are expected to come to an agreement on health benefits for trade-displaced workers sometime in August ("Congressional Quarterly Audio Report," 7/1). The measure approved by the House would give uninsured trade-displaced workers a health insurance subsidy set at 60% of the overall cost of coverage and the Senate-approved version would give workers a 70% subsidy. The workers could use the tax credits to purchase health insurance through COBRA -- the 1986 Consolidated Omnibus Budget Reconciliation Act, which allows unemployed workers to retain employer-sponsored health coverage by paying 102% of the premiums -- or through group health insurance pools established by states (Kaiser Daily Health Policy Report, 6/27). Goldreich notes, however, that a plan by Sen. Edward Kennedy (D-Mass.) to require companies with more than 100 employees to offer health insurance and a proposal by a bipartisan group to spend $100 billion over 10 years to expand health coverage through Medicaid and tax credits are unlikely to be approved ("Congressional Quarterly Audio Report," 7/1).

Goldreich's full report is available online.