Medicare Plan Clears House Hurdle

Republicans eased their Medicare prescription drug bill over its first House hurdle Tuesday night, rejecting Democratic claims it would leave seniors worse off and erode the foundation of the 38-year-old health care program.

The vote in the House Ways and Means Committee, 25-15, largely along party lines, came after Republicans defeated Democratic attempts to reduce the clout that private industry would gain within a modernized Medicare system.

"While we do want to provide this very important new benefit we want to make sure that Medicare is sustainable for today's seniors, but just as well for tomorrow's," California Rep. Bill Thomas, the committee chairman, said of the measure that combines a new drug benefit with a new managed care option for overall health coverage.

But New York Rep. Charles Rangel, the senior Democrat on the committee, said that while Republicans tout the prescription drug coverage, "the price of that benefit is the end of Medicare as we know it. If this bill becomes law, it will start a time bomb that will go off in 2010 and end the guarantee of affordable coverage under Medicare."

The House panel struggled through hours of partisan clashes at the same time officials in the Senate worked on last-minute revisions in a bipartisan measure expected to face its first test votes on Wednesday.

Congressional budget analysts reported that bill would result in monthly premiums for drug coverage of $41. But Republican and Democratic officials alike said that was merely a mistake, and that the legislation would offer insurance at a monthly cost of $35, as long promised.

The House bill and the companion Senate measure are both designed to provide prescription drug benefits for senior citizens, to be offered by private insurance companies and subsidized by the government. In addition, the legislation would offer a new managed care option for Medicare, injecting a dose of free-market competition that the Bush administration says is needed to modernize the program while shoring up its finances ahead of a wave of retirements from the post-World War II baby boom.

Under the House measure, seniors who receive their medical coverage in traditional Medicare would pay a premium of roughly $35 monthly for drug coverage, with a deductible of $250. Insurance would then cover 80 percent of costs from $251 to $2,000. There would be no coverage from $2,000 to $4,900 in drug costs. After that level, insurance would pay 100 percent of drug costs.

In addition, the measure includes subsides for lower-income seniors that would substantially defray their costs.

In the House committee, one of the Democrats, Rep. Earl Pomeroy of North Dakota, voted for the measure, portending a renewed partisan clash when the legislation reaches the House floor next week.

In the cavernous House Ways and Means Committee room, the first Democratic challenge to fall would have allowed the federal government to offer prescription drug coverage alongside insurance companies, in a competition for business.

"You don't want one because you've got to protect the insurance companies," Rep. Jim McDermott, D-Wash., told the Republicans.

But Rep. Nancy Johnson, R-Conn., said Medicare is barely able to function with its current responsibilities, much less run a complicated prescription drug program.

"There's no way the government can negotiate (prices) on 7,000 drugs," she said. "I can't imagine where you get the idea where we could accurately reimburse for every drug on the market." The vote was 23-15.

Republicans also turned back a Democratic attempt to strip out a provision they said would undermine the overall Medicare program.

Beginning in 2010, the legislation would set the federal subsidy for Medicare in part on bids submitted by private insurance companies seeking to offer competing coverage. Currently, the federal subsidy is based on the cost of a fixed benefit, with seniors paying 25 percent, plus a deductible and co-payments, and the government picking up the rest.

The committee agreed to one change, increasing funding for rural health care by an estimated $11 billion over 10 years. The vote was unanimous.

Sen. Debbie Stabenow, D-Mich., was one of a few senators to express opposition. "This really is a question of who are we designing the system for, whether we are designing it for ... insurance companies, for the pharmaceutical companies or for the people that are covered under the system."

While many Democrats are expected to vote for the legislation, the party also intends to use the debate over the next few days to dramatize its claim that the legislation doesn't provide a generous enough benefit. One proposal that Sen. Richard Durbin of Illinois intends to offer, for example, would begin the benefit next year and eliminate a gap in coverage - but at the cost of ending the entire program in 2009.

While Thomas pressed for a vote in his committee, the House Energy and Commerce Committee was also meeting to review the bill, and it appeared the GOP majority was swinging firmly behind the measure.

There, a group of conservatives had been withholding support from the bill, pushing an alternative approach that called for older people to use a type of debit card to purchase medicine. Individuals, family members or employers could contribute money to the cards, and receive tax breaks. The government would provide money to cards held by low-income seniors.

Rep. Joe Barton, R-Texas, said he and others in his group had won agreement to have a version of their proposal inserted into the legislation through 2006, when the Medicare drug benefit would take effect. At the same time, he and others will vote for the bill. A spokesman for the committee confirmed an agreement, but said details had not been worked out.

By David Espo