Stage Set for House Vote on Medicare Bill

After six years of frustrated effort and more than four months of exhaustive House-Senate negotiations, Congress in the coming days will cast historic votes on a bill that would add a prescription drug benefit to Medicare and transform the health-care program for the elderly and disabled from a government-run system to a government-subsidized insurance market.

A congressional conference committee endorsed the legislation Thursday, setting the stage for a vote in the House as soon as tonight. Republican leaders predicted that the nearly $400-billion bill would pass both chambers by comfortable bipartisan majorities.

Vote-counters in the House, where the original bill passed by only one vote after hours of arm-twisting, worked hard to limit the defections of conservative Republicans and to secure the support of conservative Democrats.

“We’re very upbeat,” said John Feehery, spokesman for House Speaker J. Dennis Hastert (R-Ill.).

Senate Majority Leader Bill Frist (R-Tenn.), also predicting victory, said endorsements from the 35-million-member seniors group AARP and “every major physician group” made Senate passage more likely.

But at least one key Democratic opponent was reserving his option to stage a filibuster on the Senate floor.

“Now that it’s in black and white, it’s clearer than ever that this is a raw deal for America’s seniors and a windfall for HMOs and big drug companies,” said Sen. Edward M. Kennedy (D-Mass.). “It will cause millions of seniors to lose their choice of doctors and hospitals and does nothing to reduce the skyrocketing costs of prescription drugs. This bill does not deserve to pass.”

But three moderate Democrats announced that they would vote for the bill. Sens. Mary Landrieu of Louisiana, Blanche Lambert Lincoln of Arkansas and Ben Nelson of Nebraska cited drug coverage for poor seniors and a huge increase -- valued at roughly $25 billion -- in payments to doctors and hospitals in rural areas as factors in their decisions to support the bill.

In the final days of talks, negotiators lowered drug co-payments for the poorest seniors -- individuals with incomes less than $8,980 and couples earning less than $12,120 -- from $2 for generics and $5 for brand-name prescriptions to $1 and $3.

“We were able to find approximately $11 billion” to do that, said Sen. John B. Breaux (D-La.), one of only two Democratic lawmakers allowed to participate in the negotiations.

And on Wednesday night, as cost estimates from the Congressional Budget Office were arriving, negotiators made further changes to the prescription drug benefit offered to most seniors, lowering the annual deductible for most seniors from $275 to $250 and raising the cap on the amount of drug expenditures eligible for a 75% Medicare subsidy from $1,950 to $2,000.

Those adjustments added about $5 billion to the cost of the bill, said a Republican Senate aide who asked not to be identified.

CBO number-crunchers pegged the full value of the drug benefit at $540 billion over 10 years. Taking into account the $131 billion in premiums participating seniors would pay, the net cost to taxpayers would be $409.8 billion, said Sen. Don Nickles (R-Okla.).

The bill would set aside more than $14 billion in payments and risk-sharing for HMOs and preferred-provider organizations. The funds are intended to encourage managed-care plans to participate in the Medicare program and to help them offer better benefits packages at lower costs than traditional Medicare.

Nickles, chairman of the Senate Budget Committee, warned that last-minute changes in the low-income drug benefit would encourage poor seniors to buy more prescriptions. “I fought for months to keep it at $2 [for generic drugs] and $5 [for brand-name drugs], and all of a sudden it’s at $1 and $3,” he said. “Utilization is going to explode.”

Nickles also predicted that in coming years Congress would close the $2,850 gap in prescription drug coverage and that states would call on Congress to pick up more of their costs for low-income seniors.

“Take these two things together, and the cost of this program explodes,” he said.

Nickles was one of two Republican lawmakers who criticized the final bill as Thursday’s meeting concluded the work of the 17-member House-Senate conference committee. It was the first meeting since August at which the committee’s chairman, Rep. Bill Thomas (R-Bakersfield), had allowed more than two Democrats -- Sens. Breaux and Max Baucus of Montana -- to attend.

Sen. Jon Kyl (R-Ariz.) said he was “very concerned that our promise of an insurance alternative to Medicare will not be fulfilled.” Other lawmakers said although the bill was not perfect, it represented Congress’ best opportunity for providing seniors with prescription drug coverage and making Medicare more cost-effective and sustainable.

The bill is “not just for 40 million seniors but for 140 million taxpayers,” Thomas said.

House Majority Leader Tom DeLay (R-Texas) called the bill “a brilliant piece of work.” Mentioning several provisions that are important to House conservatives, he said that bringing more private managed-care plans into Medicare and adding a cost-containment mechanism represented a “huge change in philosophy.” Ultimately, he said, “you have to get what you can get at the opportunities that are presented.”

DeLay and other Republican negotiators also praised the bill’s tax-deferred health savings account, which would cost the government almost $7 billion in lost revenue.

Democratic lawmakers -- particularly those not allowed to participate in the talks -- had harsh words for both the process and the product.

Calling it the “worst piece of legislation ever written in this building and the greatest gift” Congress had ever bestowed on drug companies and insurance companies, Rep. Marion Berry (D-Ark.) said the legislation was a “shameful attempt to deceive America’s seniors.”

Rep. John D. Dingell (D-Mich.), whose father had written the original Medicare legislation, almost appeared more saddened than angry.

He called the bill’s requirement that traditional Medicare compete with private health plans, which would receive government subsidies, “the dirtiest, most unfair kind of competition.”

“I must oppose spending tax dollars on extra payments to managed-care companies instead of our seniors,” he said. “The battle now being waged is simply for the preservation of Medicare.”