House Backs GOP Medicare Drug Benefit

A fiercely divided House on Wednesday approved a prescription drug coverage plan for 40 million Medicare beneficiaries, setting the stage for one of the most contentious battles of the fall campaign season.

Republicans pushed through their proposal on a vote of 217 to 214, dismissing a written veto threat from President Clinton and the vigorous objections of Democrats who staged a brief walkout early in the day and forced a series of roll call votes to delay final adoption of the GOP plan.

The vote, capping a day of partisan rhetoric and maneuvers, signaled an escalation in the debate over how to provide a Medicare drug benefit. The surge in the price of prescription drugs in recent years has precipitated demand among older voters for help from Medicare, which does not cover medications now.

Americans 65 and over have the highest participation rate of any bloc of voters and, with control of the House at stake, lawmakers are eagerly seeking support among these voters. Both parties hope to secure an advantage in November as they fight for control of the White House and Congress.

Both sides now agree that Medicare beneficiaries need financial help in paying for prescription drugs, the fastest-growing component of health care costs. But they are far apart in deciding the best mechanism for delivering the benefit.

Republicans want insurance companies or other private firms to offer a choice of plans with drug coverage, while Democrats want it handled exclusively through the current Medicare program.

Gephardt Calls Proposal ‘a Sham’

If Congress were to add drug coverage to Medicare, it would be the most sweeping change in the program since its creation in 1965.

The Republican proposal would “provide pocket-book protection now” for Medicare beneficiaries, said Rep. William M. Thomas (R-Bakersfield), prime author of the GOP plan.

But the House minority leader, Rep. Richard A. Gephardt (D-Mo.), denounced the bill. “It’s a sham. It’s a hoax,” he said.

Meanwhile, Sen. William V. Roth Jr. (R-Del.), chairman of the Senate Finance Committee, promised that his panel would consider and approve a Medicare drug benefit after Congress returns from its July 4 recess.

The outlook for approval this year of a bill that Clinton would be willing to sign is uncertain. Members of Congress, officials of both parties and pollsters are actively debating the merits of passing a bill, then going home and citing the vote as a promise fulfilled for older Americans. Alternatively, lawmakers could continue to debate the issue and use it as a weapon to pummel their opponents during the fall campaign.

The Republican plan approved Wednesday would be a voluntary program, with those who enroll paying an average premium estimated at $37 a month. There would be a $250 annual deductible, and the participant would pay 50% of costs for the first $2,100 worth of drugs each year. The beneficiary then would pay all additional costs until a “catastrophic” spending limit of $6,000 had been met for the year. The policy would pay 100% of all additional costs.

Coverage would be free for individuals with incomes below $11,272 a year, and couples with incomes of $15,187 or less.

How Party Plans Would Differ

The GOP proposal calls for all beneficiaries to have the choice of at least two competing plans. Coverage would begin in 2003.

The Democratic proposal, run directly through Medicare, would carry a premium of $25 a month, with the beneficiary paying 50% of the cost of the first $2,000 in drug spending. Catastrophic coverage would begin after an individual had spent $4,000 out of pocket in a year.

At the White House, Clinton denounced the House GOP plan as “an empty promise for too many of our seniors.”

“Their plan is designed to benefit the companies who make the prescription drugs, not the older Americans who need to take them,” the president said. “It puts special interests above the public interest.”

Firing back, House Speaker J. Dennis Hastert (R-Ill.) said that Democrats are “standing in the way of progress on this important issue” and he accused them of resorting to “scare tactics and political games.”

The Democrats forced repeated roll call votes throughout the day on the House floor on minor procedural issues, delaying final consideration of the GOP bill.

Citing a report that drug costs are rising at more than 10% a year, Clinton said: “That is too heavy a burden for our older seniors to pay and for our people with disabilities to pay.”

New Treatments Seen as Costly

The announcement this week of the successful mapping of the human genome makes it likely that the pharmaceutical industry will be producing costly new individual prescriptions to help ameliorate illnesses common among older people.

“If our seniors and people with disabilities can’t afford” the new treatments, then the progress will be illusory, the president said.

Prescription drugs are becoming an increasingly important component of medical care, often replacing such traditional treatments as surgery and long hospital stays.

When Medicare--which serves those 65 and over and the disabled of all ages--was begun, the major expenses were hospital stays and treatments by doctors and drugs were much less important.

Medicare has some sharply limited drug coverage now, including medications administered during hospital stays, and some specialized medications used outside the hospital by people who have had transplant operations.

Rep. Matthew G. Martinez (D-Monterey Park) was the sole member of the California delegation to cross party lines and vote with the opposition.

Martinez, who lost his party’s renomination earlier this year, has since sided with Republicans on a number of key votes.

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Times staff writer James Gerstenzang contributed to this story.

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Drug Proposal Comparison

House Republicans and the Clinton administration, joined by congressional Democrats, are pushing competing proposals to add prescription drug coverage to Medicare. Under both plans, participation by senior citizens would be optional. The Republican legislation would make benefits available starting in 2003, as would congressional Democrats. Clinton is calling for an earlier start, in 2002.

A comparison of GOP and Democrats’ Medicare drug proposals:

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GOP PLAN

Government cost : $155 billion (over 10 years)

Medicare would oversee enrollment in government-subsidized and approved prescription drug plans sold by private insurance companies. HMOs participating in Medicare would also have to offer drug coverage.

The standard policy includes:

* Monthly premiums $35 to $40.

* $250 annual deductible.

* 50% co-payment for each prescription.

* An end to coverage for the year at $2,100 in total drug spending after deductible. Insurance would pay an annual maximum of $1,050 in prescription costs. Catastrophic coverage begins after a beneficiary spends $6,000.

Senior citizens with annual incomes below 135% of the federal poverty level--about $11,200 for an individual and $15,200 for a couple--would not have to pay monthly premiums or deductible. Co-payments would be lower, $2 to $5 per prescription.

Those with incomes from 135% to 150% of poverty--about $12,600 for an individual and $16,900 for a couple--would have their monthly premiums subsidized on a sliding scale.

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DEMOCRATS’ PLAN

Government cost : $253 billion (over 10 years)

Medicare would operate a standard prescription drug benefit, the same for everyone, with some help from benefit management companies that many private health plans use. HMOs participating in Medicare would have to offer the same benefit. It would have:

* Monthly premiums starting at $25 and gradually rising to $50 over several years.

* No deductible.

* 50% co-payment for each prescription.

* An end to coverage for the year at $2,000 in total drug spending, gradually rising to $5,000 as premiums increase. That means Medicare would pay an annual maximum of $1,000 in prescription costs at first, rising to $2,500.

* Catastrophic coverage paying all costs would kick in after $4,000 in annual out-of-pocket spending by a beneficiary.

Senior citizens with incomes below 135% of poverty would not have to pay monthly premiums, deductibles or co-payments. Those with incomes from 135% to 150% of poverty would have their monthly premiums subsidized on a sliding scale.