Sen. Roth Offers Compromise on Medicare Drug Benefit

An influential Republican senator proposed a compromise Wednesday on Medicare coverage of prescription drugs in which the government program would share the costs with the elderly and beneficiaries would gain enhanced hospital benefits.

The proposal by Sen. William V. Roth Jr., chairman of the Senate Finance Committee, marked a major attempt to bridge a divide between Republicans and Democrats in this election year. It was greeted by cautious optimism among Democrats and the White House--and some grumbling from Republicans concerned about potentially huge new government costs and bureaucracy.

But Roth (R-Del.) said the differences could be resolved in time for a Senate vote before Congress ends its session this year.

“This has been a real effort to bring together a bipartisan program,” Roth told reporters prior to a closed-door Finance Committee meeting. “We’re all in agreement that Medicare is one of our most important domestic programs, but it has to be brought into the 21st century.”

The draft measure is an attempt to find middle ground between the 10-year, $250-billion government-run Medicare drug proposal advocated by President Clinton and a House-passed Republican bill based mainly on subsidized private insurance. Clinton has offered to sign a GOP tax cut for married couples if Congress sends him an acceptable Medicare drug measure.

In a written statement, Clinton urged lawmakers to continue working in a bipartisan fashion to provide the drug benefit.

“I am pleased that there is growing momentum on Capitol Hill to provide a real Medicare prescription drug benefit, not a flawed insurance model,” Clinton said.

White House spokesman Joe Lockhart went further, calling Roth’s proposal “a sharp repudiation of what the House Republicans proposed.”

Rep. William M. Thomas (R-Bakersfield), an architect of the House bill, said he welcomed the Senate’s entry into the debate but said there weren’t enough specifics to comment in detail. He accused the White House of “working to divide and destroy, not to try to reach a compromise.”

In Roth’s plan, Medicare recipients would have a choice between the traditional program, which has no drug benefit, and a new “expanded option” program.

For people who opted for the new system, the government would share prescription drug expenses above a not-yet-finalized deductible amount. One deductible being discussed was $500.

Above that deductible, the government would pay half of all drug costs up to another level--one preliminary figure was $3,500--and as much as 80% of the costs above that. This appeals to Republican conservatives interested in holding down costs, but many Democrats say it would leave out millions of people with modest drug expenses and could still impose a steep burden on others.

“Only the ones with the highest drug costs would be in the program,” said Sen. John B. Breaux (D-La.). “That’s almost a nonstarter with a lot of people.”

The drug benefit would be administered by a new government office that would contract with private companies to negotiate drug purchases and provide other benefits. There also would be unspecified subsidies for low-income people to buy medicine.

People who took the “expanded option” Medicare choice would get a new hospitalization system as well.

Under current law, Medicare recipients must pay a $776 deductible per hospitalization and a $100 deductible for services under Part B, such as home health care and skilled nursing. They sometimes have to pay the hospitalization deductible up to three times a year because of restrictions on the length of time of each hospital stay per illness.

Under the Roth plan, both deductibles would be combined into one--the amount hasn’t yet been decided, but $500 has been used as an example--and people on Medicare would get a full 365 days of hospitalization with no further co-payment. Again to hold down costs, some new co-payments of about 20% could be required for services under Medicare Part B.

To Democrats, Roth’s proposal is “a distant light at the end of the tunnel, but it’s a light nonetheless,” said Sen. Max Baucus (D-Mont.).