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Senate Writing Rx For Medicare

The Senate Monday begins debating a plan that would make the most far-reaching changes in Medicare since the program was created 38 years ago.

The measure offers prescription drug benefits for the nation's 40 million Medicare beneficiaries. Coverage would be offered through private insurance companies and financed in part through government subsidies. It also provides for a new managed care option, preferred provider organizations

Senate leaders have set aside two weeks for debate.

Some Senate Democrats are warning the bill's drug benefit is stingier than what most working Americans enjoy. They also say it has numerous flaws, including gaps in coverage.

The highly-anticipated prescription drug bill that is heading to the Senate for debate has some deep flaws that need changing — particularly that its benefits are not offered through traditional Medicare, Sen. Debbie Stabenow, D-Mich., said Saturday.

Stabenow, in the Democrats' weekly radio address, said that if drug benefits were not offered through Medicare, older Americans would be at the mercy of insurance companies who could set different premiums and levels of coverage in different parts of the country, or even within the same state.

In addition, she said, the private insurance plan a person picks could choose to drop service at any time.

"Does this make sense?" Stabenow said. "Only if you're a pharmaceutical company or an insurance company." She heads the Senate Democratic task force on health care issues.

On a bipartisan vote of 16-to-five, the Senate Finance Committee Thursday approved the overhaul bill.

"The legislation has tremendous momentum. It's going to pass. It's going to be enacted. The president is going to sign it," said Sen. Max Baucus, D-Mont.

In two speeches last week, reports CBS News White House Correspondent Mark Knoller, President Bush touted the Medicare reform bill. It was a campaign promise in 2000, and Mr. Bush wants to deliver on it, to make sure the Democrats don't have Medicare to use as a campaign issue against him in 2004.

Senate Majority Leader Bill Frist hopes the plan can be approved before lawmakers take their July 4 holiday break. The House is beginning work on its own proposal and Frist hopes the differences in the two plans can be worked out by the end of next month.

Sen. Byron Dorgan, D-N.D., said he plans to introduce an amendment that would allow pharmacists and distributors to access identical prescription drugs from Canada.

"The ultimate result of that would be that pharmaceuticals would have to re-price their drugs in this country," Dorgan said. "We pay the highest prices in the world at this point."

Both the House and Senate bills create a new option for Medicare recipients: preferred provider organizations (PPO), in which patients are encouraged to use doctors and hospitals in a network but may see others for an extra charge.

The House bill would inject a dose of free-market competition. Beginning in 2010, it would require Medicare to compete for business with private insurance companies. If its costs are too high, the premiums will rise; that means it could cost people extra if they want to stay in traditional Medicare.

On the drug benefit, the House would cover a larger share — 80 percent — of a patient's first $2,000 in drug costs. Nearly two in three beneficiaries will not spend more than $2,000 in a given year.

The Senate picks up just 50 percent of the tab, but the help covers the first $5,400 in drug spending. People with higher drug expenses would benefit more from the Senate plan.

If people want to join a health maintenance organization (HMO) or PPO, that choice should be available as well, Stabenow said. If they prefer traditional Medicare, they should be able to make that choice, she said.

Democrats believe that a quick way to lower prices and lower health care costs is to allow Americans to buy American-made drugs from Canada, where they're often sold at a much lower price, Stabenow said. The prescription drug benefit being worked on in Congress doesn't take effect until 2006. The Democrats have legislation that would give people the relief they need now, she said.