Curing The Medicare Stalemate?

Stalemate over prescription drug coverage for senior citizens could be living on borrowed time on Capitol Hill.

CBS News Chief Washington Correspondent Bob Schieffer reports a compromise may be within reach over how to help seniors pay their skyrocketing prescription drug bills.

Bill Roth, the Senate Finance Committee chairman who faces a tough re-election fight this fall, informed the committee that he's breaking with GOP congressional leaders and will push a plan to let Medicare to pay some prescription drug bills - something Republicans have been against in the past because it is so expensive.

"So what we are seeking here is to develop a program that would have broad bipartisan support," said Roth, a Republican from Delaware.

Democrats and Republicans agree that drug costs for seniors are out of control, but have been at loggerheads over how to provide relief. The issue has been so contentious that two weeks ago, Democrats walked out in protest when House Republicans passed a plan that encourages seniors to buy private insurance to pay drug costs. Insurance companies would get government subsidies to keep premiums low. President Clinton promised to veto that.

Democrats want to create a new Medicare benefit to help with drug expenses in return for a $25 a month premium. Republicans have opposed that as too expensive. Roth wants something in between: Medicare paying half the cost of drugs up to $3500 and 80 percent if costs go higher, with a deductible somewhere around $500.

Initial reviews of Roth's proposed compromise by Democrats were cautious but upbeat.

"This is a positive event and a welcome event in a season when there are not many such," said Sen. Daniel Patrick Moynihan of New York, the ranking Democrat on the Finance Committee.

It's the first major good news I've had in some time," said Sen. Max Baucus (D-Mont.)

Plan Particulars
The President's:
  • Starts in 2002
  • $25 monthly premium
  • No deductible
  • Gov't pays half the cost of prescription drugs up to a cap. The cap starts at $1000 and rises to $2,500 by 2009. Patients pay all costs between $2,500 and $4,000.
  • Private sector managers run program
  • Gov't pays premiums and co-pay for people earning up to 135 percent of poverty line, and some of the costs for people earning up to 150 percent of the poverty line.
  • Estimated cost is $264 billon over 10 years.

    House Republicans':

  • Starts in 2003
  • Monthly premium would vary by plan.
  • $250 deductible
  • Insurance companies run prescription benefit programs and gov't funds half of patients' costs from $250 up to $2,100. Patients then pay 100 percent of costs up to $6,000.
  • New office called Medicare Benefits Administration runs program
  • Gov't pays all premiums and most shared payments for people earning up to 135 percent of poverty line, and subsidizes premiums for people earning up to150 percent.
  • Cost estimated at $159 billion over 10 years.


  • The government would pay half of all drug costs, above the deductible, up to a cap and as much as 80 percent the costs above that.
  • Program run by benefit managers
  • No cost estimates yet.
    (Source: CBO, AP)

  • Finance Committee members met behind closed doors Wednesday to discuss the Roth proposal.

    White House officials said the Roth plan could form a basis for a final compromise, but they still have misgivings about the Senate version.

    Still, said White House spokesman Joe Lockhart, "I think that the move in the Senate to have a prescription drug program within Medicare should provide momentum for what the president's been proposing."

    Lockhart called the Senate move "a sharp repudiation of what the House Republicans proposed."

    Roth's plan would use benefit managers, much like health insurers do, to buy drugs and design services at the lowest possible cost, plus it would provide subsidies for low-income people to buy drugs. In addition, Roth envisions changes to the current Medicare Part A and Part B programs. Under current law, Medicare recipients must pay a $776 deductible per hospitalization and a $100 deductible for services under Part B.

    For individuals who choose the new plan, the Roth proposal would combine both deductibles into one - the amount hasn't yet been decided - and people on Medicare would get a full 365 days of hospitalization with no other co-payment. Currently, there is a tiered system of co-payments for hospitalization and no coverage after 150 days.

    A myriad of other details remain to be worked out, including the proposal's cost. The GOP budget resolution calls for a prescription drug benefit costing $40 billion over five years if Medicare is also reformed, but Roth's plan could cost much more.

    So, the proposal is a long, long way from a done deal, because as written it won't satisfy Republicans or Democrats. But one senator told CBS News that it provides lawmakers a place to start talking on a subject where they were so far apart there was nothing to talk about.