Medicare: No Need To Hock Jewelry

Medicare said Monday that low-income elderly people won't have to declare wedding rings, burial insurance, family homes, autos and certain other assets to determine whether they qualify to have their medicines paid for under the prescription drug program that begins in 2006.

The Bush administration is filling in the multibillion-dollar details of last year's Medicare overhaul, from the drug insurance program that starts in 2006 to the payment rates for cancer doctors.

Nearly 11 million low-income older and disabled Americans are projected to take part in the drug benefit, the administration said in issuing 1,956 pages of proposed regulations to govern the program. On average, the government will pay 95 percent of drug costs for low-income Medicare clients.

Major changes are expected Tuesday when Medicare announces next year's payments to cancer doctors for medicines administered in their offices. Anticipating reductions, some cancer specialists have talked about cutting back their practices and sending patients to hospitals to get treatment.

The law called for tying reimbursements for chemotherapy drugs more closely to the actual price that doctors pay rather than the listed wholesale price. Doctors pay far less than that benchmark because drug companies give them substantial discounts.

While doctors acknowledge they have been overpaid for the drugs, they maintain they have been underpaid for their practice expenses and complain that the new law does not do enough to address that issue.

The American Society of Clinical Oncology has asked Congress to essentially freeze payments at current levels until various agencies complete studies of the new pricing system. The prospects for a freeze are dim. Republican leaders say no changes will be made in Medicare law this year.

Supporters and opponents of the law alike have agreed about the value of the drug benefit for the poor. Congress included a provision in the law that would disqualify low-income older people with more than a few thousand dollars in assets from receiving subsidized coverage. Studies suggest a couple of million people could be excluded by that restriction.

Democratic lawmakers and other critics complained that the value of heirlooms and insurance policies to pay funeral costs could keep some people from receiving the aid.

The administration agreed and proposed to count as assets mainly bank accounts, retirement savings and real estate other than a beneficiary's home.

"Nonliquid assets are not going to be counted," Health and Human Services Secretary Tommy Thompson said.

Medicare officials, however, could provide no estimate of how many more people might qualify for the government aid.

The administration's estimate of 11 million low-income participants is substantially higher than that of the Congressional Budget Office, which estimated 9.75 million people would get the subsidy by 2013. The difference helps explain their widely divergent predictions of the cost of the new law over 10 years.

CBO puts the cost at $395 billion. The administration says the law will cost $534 billion, and it drew severe criticism, including from some Republican lawmakers who reluctantly voted for the legislation last year, when it revealed the projection in January.

When the drug program begins, participants who do not qualify for the low-income subsidy will pay a $35 monthly premium and the first $250 in drug costs if they choose to sign up for the coverage. Medicare will pick up 75 percent of the next $2,000 in prescription expenses, after which there will be a gap in coverage during which participants are responsible for their entire drug bill.

But once prescription costs top $5,100, Medicare coverage resumes, with the government paying 95 percent of the bills from that point.

Despite complaints that the program is insufficiently generous, the administration said the typical older American who now has no insurance would see drug costs sliced in half.

The administration issued the regulations, in the works for months, on the first day of the Democratic convention in the midst of a campaign season in which Thompson said every pronouncement is evaluated for its political content.

However, White House spokesman Scott McClellan insisted politics played no role in Monday's release. "We're getting these regulations out as quickly as we can," he said.

Medicare is accepting comments on the proposal until Oct. 4. It plans to begin enrollment in drug plans in the fall of 2005.