Conferees Near Medicare Rx Deal

Democrats Warn that Drug Benefit Is "At Grave Risk"

October 27, 2003
Members of the conference committee seeking to reconcile the House and Senate Medicare/prescription drug bills are reported to be near agreement on a final plan. But key Democratic Senators warn that many important issues remain to be satisfactorily resolved.

"A partisan conference report that jeopardizes Medicare and does not provide meaningful assistance to the elderly and disabled should not, and will not, pass," 41 Senators said in an open letter to Bush Friday.

Sen. Edward M. Kennedy (D-Mass.) said the drug benefit was "at grave risk at this time" because House Republicans were pushing the Medicare bill in a conservative direction. Sen. Tom Daschle (D-S.D.) said the House-backed plan would lead to the " privatization of Medicare" and result in higher premiums for those in the traditional program.

The Senators also opposed House Republican demands for an enforceable limit on Medicare spending for new drug benefits and demanded more incentives for employers to maintain drug benefits for retirees.

Forty-one senators — 39 Democrats, an independent and a Republican, Olympia J. Snowe of Maine — signed the letter, urging President Bush to intervene in the Medicare negotiations to ensure that the final bill can win bipartisan support.

The Democrats complained about the secrecy surrounding the conference committee's work and said the Senate will not accept several proposals considered essential by House conservatives.

Meanwhile, the chairman of the conference committee said that the panel will create a mechanism to slow the growth of Medicare spending. Rep. Bill Thomas (R-Calif.) said negotiators are devising a mechanism to ensure that the program remains fiscally sustainable. Without it, Mr. Thomas said, the final measure cannot win approval in the House, which passed the original bill by one vote in June.

Congress has set aside $400 billion over 10 years for the new drug benefits. Conservative House Republicans have said they will not vote for the measure unless it has a cost-control mechanism and promotes competition between traditional Medicare and private health plans.

George J. Kourpias, President of the Alliance for Retired Americans, an AFL-CIO group,said, "The structure of the proposed bill, as reported by the news media, confirms our worst fears."

Kourpias cites the following objections to the proposed bill:

• privatizes Medicare by calling for traditional fee-for-service Medicare to compete directly with private health plans beginning in 2010.
• adds a means-test to the Part B premium, forcing higher income seniors to pay more for coverage. This provision was not in either H.R. 1 or S.1 but has been added by the negotiators.
• endangers employer-provided health benefits by not providing sufficient employer incentives such as tax credits or subsidies.
• includes a coverage gap that would force beneficiaries whose drug costs exceed $2,200 a year to pay out-of-pocket for their drug costs between $2,201 and approximately $5,000.
• increases costs to states for "dual eligibles"
• people who are eligible for both Medicare and Medicaid.