Senate Poised to Pass Drug Plan That Would Overhaul Medicare

The effort to bring a Medicare prescription drug benefit to the nation’s seniors and disabled cleared two Senate hurdles Monday over the strenuous objections of many Democrats, who argued that the bill to overhaul the 38-year-old program would ultimately lead to its demise.

Republicans defeated two procedural efforts by Democrats to block the nearly $400-billion Medicare bill, and lawmakers on both sides of the issue indicated that a final vote would occur before day’s end. Instead, Senate leaders agreed late Monday to postpone the vote until this morning.

While prospects for a vote shifted much of Monday, the likely fate of the bill remained unchanged. Republicans hold 51 seats in the 100-member Senate, and it was clear that, even with the expected defections of some GOP senators, they had gained enough Democratic supporters to ensure passage. The House approved the bill 220 to 215 early Saturday morning after the Republican leadership held the vote open for an unprecedented three hours.

The GOP’s apparent success in ensuring passage of the Medicare bill today was tempered somewhat by the Senate’s decision Monday evening to postpone, at least until January, consideration of legislation revamping the nation’s energy policy. That bill and Medicare reform topped President Bush’s list of domestic priorities for this year.

Republican supporters of the Medicare legislation said that the new pharmaceutical benefit contained in the bill would help millions of seniors buy lifesaving drugs, and that the greater involvement of private insurance companies -- aided by $14 billion in subsidies and incentives -- would save taxpayers money and keep Medicare from going broke.

“Today is a historic day and a momentous day,” Senate Majority Leader Bill Frist (R-Tenn.) said Monday, anticipating a vote by the end of the day.

Democrats called it a “sad day” for Medicare’s 40 million elderly and disabled beneficiaries. They predicted that the bill’s reforms would encourage younger, healthier beneficiaries to join government-subsidized health maintenance or preferred-provider organizations, leaving the shrinking traditional fee-for-service program with older, sicker seniors who would be forced to pay ever-higher premiums.

“This [bill] starts the unraveling of the Medicare system,” said Sen. Edward M. Kennedy (D-Mass.).

But Democrats vowed to fight another day.

“This will not be the last vote, I guarantee you,” said Senate Minority Leader Tom Daschle (D-S.D.). “This fight is too important to give up now.”

Sen. Bill Nelson (D-Fla.) said he already was planning to introduce legislation designed to allow Medicare, like the Veterans Administration, to use its massive purchasing power to negotiate lower prices with drug manufacturers. Because the bill prohibits Medicare from directly negotiating drug discounts, Democrats said, the legislation would do nothing to lower drug prices, one of the nation’s fasting-growing health-care costs.

Bush administration officials dismissed that argument, saying that the private drug-benefit managers who will administer the new Medicare benefit do such negotiating all the time.

“They negotiate for us,” said Medicare administrator Tom Scully.

Bush, who made adding a prescription drug benefit to Medicare a central element of his “compassionate conservatism” in the 2000 presidential campaign, hailed the anticipated victory for his domestic policy agenda.

“Modernizing Medicare will make the system better and will enable us to say to millions of seniors, ‘We’ve kept our promise to America’s seniors,’ ” Bush said Monday afternoon in Colorado, where he met with about 100 relatives of U.S. soldiers killed or wounded in Iraq.

Senate Democrats had decided last week to proceed with normal consideration of the bill, but after House Republican leaders used parliamentary maneuvers in the predawn hours Saturday to reverse an apparent Democratic victory, Kennedy vowed to delay and, if possible, block a Senate vote.

At midday Monday, lawmakers began voting on whether to limit debate on the bill. By a comfortable margin of 70 to 29, 11 Democrats, one independent and all but two Republicans voted to force a vote on the bill.

Democrats immediately countered by alleging that the legislation violated congressional spending limits. After two hours of debate, lawmakers rejected that motion by just one vote.

The 61-39 vote came only after Sen. Trent Lott (R-Miss.), who opposes the bill, submitted to pressure from other Republicans to reject the budget motion. Democratic Sen. Ron Wyden of Oregon then cast the final vote that dashed Democrats’ hopes of blocking the bill.

On both these measures, supporters of the bill needed 60 votes.

Reflecting the bill’s breadth and complexity, in some cases senators from the same state and the same party took different positions based on conflicting facts and figures.

California Sen. Dianne Feinstein, a Democrat, explained Sunday why she had decided to support the bill.

She said the bill would increase Medicare payments to the state’s hospitals and doctors, offer subsidized drug coverage to 351,000 low-income Californians who now have none, and cut in half -- to about 198,000 -- the number of retirees whose unions and former employers are likely to drop their supplemental health coverage because of the new benefit.

But the state’s other senator, Democrat Barbara Boxer, strongly opposes the bill.

“This bill really hurts my people,” she said, noting that the very poorest of the elderly would have to pay more for drugs under Medicare than they now do under Medi-Cal, the state’s health-care program for low-income residents. Under the bill, these older Californians would get their drugs through Medicare instead.

Others, Boxer argued, would lose their retiree benefits or pay higher Medicare premiums.

Sen. Olympia J. Snowe (R-Maine), a late convert to the bill’s controversial mix of drug coverage, private competition and billions of dollars in increased government payments for health- care interests, reflected the ambivalence of many supporters.

“It’s not everything it could be; it’s not everything it should be,” she said. Ultimately, she said, lawmakers needed to compare the bill with the status quo. In the end, she said, the bill is “instituting a revolutionary change in the Medicare program.”

Sen. Blanche Lambert Lincoln (D-Ark.), a supporter of the bill, called on seniors and lawmakers alike to be realistic.

“I think eventually people are going to realize that ... a free prescription drug benefit is not feasible,” she said. “We’re in debt up to our eyeballs.”

Starting in 2006, most seniors could buy into the standard drug benefit for a monthly premium of about $35. After seniors paid a deductible of $250 that year, Medicare would pay 75%, or $1,500, of the next $2,000 in drug costs. Including premiums, seniors would pay a total of $1,170 of their first $2,250 in annual drug costs.

Seniors would pay 100% of their next $2,850 in drug costs. After a senior’s total annual drug costs reached $5,100 -- meaning out-of-pocket costs would total $3,600 plus $420 in premiums, Medicare would pay 95% of remaining drug costs that year.

Premiums and deductibles would increase every year, reaching $58 and $445, respectively, in 2013.

Drug coverage for low-income seniors is far more generous.

The bill also includes about $70 billion in direct subsidies to employers, plus about $16 billion in tax benefits, to encourage them to maintain supplemental health coverage for their retirees. Even with those payments, as many as half of the nation’s 4 million seniors who have retiree health benefits are expected to lose them, according to the Congressional Budget Office.