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The Democratic senator's idea is now the rival to a Republican plan in a race to offer a prescription drug benefit for seniors before November's election.
By SARA FRITZ, Times Washington Bureau Chief
© St. Petersburg Times, published June 12, 2002
WASHINGTON -- Senate Democrats on Tuesday embraced Florida Sen. Bob Graham's $425-billion proposal to provide a prescription drug benefit for seniors. It becomes the Democratic alternative to a $350-billion Republican plan being drafted in the House.
Both parties say they are committed to enacting a Medicare prescription drug benefit before the upcoming election. But if, as expected, they fail to reconcile their differences by then, the proposals will become an important element of the political platforms on which congressional candidates will run in November.
Because Graham's proposal is more generous, it will likely have the support of the AARP and many other groups representing Medicare beneficiaries. But neither party's proposal comes close to the coverage offered by most private plans.
Getting the endorsement of the Senate Democratic leaders for his plan was a personal victory for Graham, who has been trying to lead his party on Medicare issues for a number of years. As chairman of the Senate Intelligence Committee, he also is deeply involved in the other big issue under discussion: homeland security.
The Democrats' decision to endorse Graham's plan will not be announced publicly until today. But Senate Majority Leader Tom Daschle, D-S.D., told a closed-door meeting of the Senate Democratic caucus on Tuesday that the party leadership had decided to back the bill.
There was no vote in the caucus. Daschle's decision was based on private negotiations that included Graham and Sen. Edward M. Kennedy, D-Mass., to whom most Democrats look to for advice on issues related to health care.
Co-sponsored by Sen. Zell Miller, D-Ga., Graham's plan would require seniors to pay a $25 monthly premium for insurance that would fund 50 percent of drug costs up to $4,000, and 100 percent of costs in excess of $4,000 a year. There would be no deductible.
Unlike an earlier proposal set forth in May by Graham and Miller, this one would offer an optional plan with a fixed copay.
Although the House Republican plan has not been finalized, it is expected to pay 80 percent of seniors' annual drug costs up to $1,000, and 50 percent from $1,000 to $2,000, with a $250 annual deductible. The government would then pay 100 percent of drug costs from $2,000 to $4,500, after which a catastrophic plan would kick in. The monthly premium would be $34.
Miller, in a speech last week on the Senate floor, acknowledged that most members of Congress do not expect either proposal to be adopted this year and he challenged lawmakers not to give in to the naysayers.
"That is exactly the blame game that smells up this place," Miller said. "Time is running out, and I hate to tell you that some people want it to run out."
Republicans earlier promised that the House would pass a Medicare measure before the Memorial Day recess. But their bill was delayed by jurisdictional squabbles and intense disagreement over whether it also should increase reimbursements for hospitals, HMOs and doctors.
Not until recently did House Republicans leaders settle on an increase in payments to providers as a part of the bill. Hospitals were promised a $9-billion increase over the next 10 years, and doctors persuaded the Republicans to give them $20-billion over the next five years.
Without these increases, payments to providers were likely to decline 14 percent over the next three years under a formula that automatically sets the rates. The cuts were so deep that many doctors threatened to stop seeing Medicare patients.
With these payments as part of the bill, however, the House GOP plan has won the support of numerous trade associations representing professionals that provide health care to seniors, such as the American Medical Association.
Graham's bill does not include increases for providers, but Democrats say they are planning to offer separate legislation to accomplish the same thing.
Either way, the increased provider payments would add to the cost, and both bills exceed the ceiling of $300-billion that Congress previously has put on increases in Medicare spending over the next 10 years.
The Republican bill will include a variety of other changes in the existing Medicare program designed to to save money; Graham's bill simply creates a drug benefit and does nothing to alter the basic Medicare program. Graham's approach seems to be more popular among members of both parties.
Both drug plans would be voluntary.
It is an open question whether a majority of seniors will support either plan, considering that neither will cover much of the $1.8-trillion that Medicare beneficiaries are expected to spend on drugs in the next decade, according to estimates of the Congressional Budget Office. The Republican plan covers benefits for 10 years; Graham's plan would begin in 2004 and expire in 2010.
There is one other significant difference in the two plans. Under the Democratic plan, the government would administer the prescription drug program with the help of private companies known as pharmacy benefit managers. The Republican plan would be administered by private insurers who would compete for customers among Medicare beneficiaries.