Senate Unlikely to Pass a Medicare Prescription Drug Benefit, Will Focus on Generic Drug Legislation, CQ’s Carey Says

Neither of two competing Medicare prescription drug benefit bills under consideration in the Senate has the 60 votes necessary to overcome "expected procedural hurdles," and "conventional wisdom" holds that the Senate will not pass any such legislation this year, Congressional Quarterly reporter Mary Agnes Carey says in this week's "Congressional Quarterly Audio Report" (Carey, "Congressional Quarterly Audio Report," 7/22). One of the bills, sponsored by Sens. Bob Graham (D-Fla.) and Zell Miller (D-Ga.), would establish a Medicare prescription drug benefit at an estimated cost of as much as $500 billion over eight years. Under the legislation, seniors would pay a $25 monthly premium with no deductible, a $10 copayment for generic drugs and a $40 or $60 copayment for brand-name treatments. The government would cover 100% of seniors' annual out-of-pocket prescription drug costs that exceed $4,000. Low-income seniors would pay reduced premiums, and the bill would exempt Medicare beneficiaries with annual incomes less than 135% of the federal poverty level from premiums and copayments. Under the other bill, proposed by a tripartisan group that includes Sens. Charles Grassley (R-Iowa), Olympia Snowe (R-Maine), Orrin Hatch (R-Utah), John Breaux (D-La.) and James Jeffords (I-Vt.), Medicare beneficiaries would pay a $35 monthly premium, and the government would cover 50% of their annual out-of-pocket prescription drug costs up to $2,000 or $2,500, no costs between $2,000 or $2,500 and $3,700, 90% of costs that exceed $3,700 and 100% of costs that exceed $6,000. The 10-year bill would cost about $330 billion (Kaiser Daily Health Policy Report, 7/19).

Point of Order
But Carey says that neither bill is likely to pass because of "budget points of order." Because the Senate did not pass a budget resolution for fiscal year 2003, it is operating under the fiscal year 2002 budget resolution, which only appropriates $300 billion for a Medicare drug benefit. Both the Democratic and tripartisan proposals would cost more than that and thus could be defeated on a budget point of order, Carey notes. Although some analysts see such legislative maneuvering as a way to avoid addressing seniors' prescription drug costs, some lawmakers "feel very strongly about the budget process and feel it must be followed," Carey says. If both bills fail, the Senate is likely to focus on a generic drug bill ( S 812) by Sens. Charles Schumer (D-N.Y.) and John McCain (R-Ariz.) ("Congressional Quarterly Audio Report," 7/22). The bill would amend a provision in the 1984 Hatch-Waxman law that allows brand-name drug companies to receive an automatic 30-month patent extension from the FDA when they file a lawsuit against generic drug makers for alleged patent infringement (Kaiser Daily Health Policy Report, 7/19). Although the bill's chances for passing are "[f]airly good," Carey says that the "issue to watch" is what amendments are added to weaken or toughen the legislation. She adds that it is "far less clear" whether the bill will pass the House ("Congressional Quarterly Audio Report," 7/22).
Carey's report is available online.