Health Care Overhaul Could Raise Medicare Rx Costs

Medicare recipients could see higher premiums for prescription drug coverage as a result of changes to complex provisions in a Senate health care bill, a senior Republican said Friday.

At issue are marching orders for a powerful new commission that would recommend annual Medicare savings to Congress. Those recommendations would go into effect unless overruled by lawmakers.

Sen. Chuck Grassley, R-Iowa, said an amendment approved by the Finance Committee in the pre-dawn hours Friday would allow the commission to recommend changes leading to higher Medicare prescription drug premiums. The Democratic amendment was approved on a 13-10 party line vote.

"Americans considering what this health care proposal means for them deserve to know that Medicare prescription drug premiums would probably go up," Grassley said in a statement.

As the prescription benefit is designed now, taxpayers cover three-fourths of the cost of the benefit, while Medicare recipients pay the remaining 25 percent.

The amendment would allow the new Medicare commission to recommend "reductions in federal premium subsidies" to the private insurance plans that deliver the prescription drug benefit. Grassley's office said the "premium subsidies" are taxpayers' share of the cost of the prescription plan. If those are reduced, the plans will make up the difference by raising premiums for seniors.

There was no immediate response from Democrats.

As originally envisioned by Finance Committee Chairman Max Baucus, D-Mont., the Medicare commission would have been barred from recommending any changes to Medicare benefits or cost-sharing.

Grassley said the Democratic amendment was geared to compensate for a deal that would exempt hospitals from the commission's cost cutting scalpel.

The hospitals have already agreed to forego $155 billion in Medicare and Medicaid payments over the next ten years to help pay for the health care overhaul.