GOP Gains Feinstein Support on Medicare

Times Staff Writer

Senate Republican leaders, confident that they will pass a Medicare prescription drug benefit, headed into a likely showdown vote today by picking up the support of a key Democrat, Sen. Dianne Feinstein of California.

“We’re going to deliver a bill,” Senate Majority Leader Bill Frist (R-Tenn.) predicted on CNN’s “Late Edition” on Sunday.

In a rare Sunday session of the Senate, Feinstein broke ranks with her party’s leaders and endorsed what would be the most sweeping change to the health-care program for senior citizens and disabled Americans since it was established in 1965.


“It is not a perfect bill, but it is a first step,” Feinstein said.

Still, the bill’s opponents promised to try to defeat the nearly $400-billion measure.

Three Democratic senators seeking their party’s presidential nomination -- John F. Kerry of Massachusetts, Joe Lieberman of Connecticut and John Edwards of North Carolina -- planned to interrupt their campaigns to return to Washington and join Sen. Edward M. Kennedy of Massachusetts in an effort to block the bill’s passage.

The bill, backed by President Bush, is expected to be a key issue in next year’s congressional and presidential campaigns.

The bill passed the House, 220-215, at 5:53 a.m. Saturday after GOP leaders held open the roll call for nearly three hours, instead of the customary 15 minutes, while they rounded up the necessary votes.

“This was Florida all over again,” Kennedy said on ABC’s “This Week” on Sunday, comparing the House Medicare action to the disputed 2000 presidential vote.

At the center of the legislation is an optional prescription drug benefit for most seniors that would begin in 2006. For the first $2,250 in drug costs each year, Medicare would pay 75% after a $250 deductible. Then there would be a gap in coverage, with patients solely responsible for the next $2,850 in drug costs.

Once seniors had paid $3,600 out of their own pockets, Medicare would cover 95% of the cost of subsequent prescriptions. The monthly premiums, starting at about $35, and annual deductibles would increase with inflation.

In addition, the bill would set aside more than $14 billion in payments and risk-sharing for health maintenance organizations and preferred-provider organizations.

The funds are intended to encourage managed-care plans to participate in Medicare and to help them offer better benefits packages at lower costs than the traditional fee-for-service program Medicare offers. Starting in 2010, pilot programs in six areas would allow managed-care plans to compete with the current program.

Senate Minority Leader Tom Daschle (D-S.D.) told NBC’s “Meet the Press” on Sunday that opponents would work as hard as they possibly could to defeat the measure. He did not explain the procedural actions they might try.

Frist expressed confidence that the bill’s supporters would prevail.

“They can’t stop it,” he said on CNN. “There’s no way. The American people, the seniors, deserve it, and we’re going to deliver it.”

While Frist criticized Democrats for fighting the Medicare bill, a fellow Republican, Sen. John McCain (R-Ariz.), said he would join Kennedy in opposing the bill.

“My viewpoint is, here we are, a nation with a half-a-trillion-dollar deficit coming up, multitrillion-dollar deficits, growth of government, 12.5% last year,” McCain said on ABC’s “This Week.” “What’s ever happened to my party’s fiscal discipline?”

During Sunday’s debate, Feinstein said the bill would bring “substantial help” to the people she represents.

It would, she said, make prescription coverage available to more than 4 million Californians, including 351,000 low-income Medicare beneficiaries in California who are not eligible for Medi-Cal and have no prescription drug coverage.

It would also provide $1 billion nationally to states for emergency medical care to undocumented immigrants over four years, including about $288 million to California, and restore $600 million to California hospitals for treatment of low-income patients over 10 years.

Joining Feinstein, Sen. Ron Wyden (D-Ore.) said he would vote yes if the bill represents the “sole opportunity to inject $400 billion in a long-sought prescription drug benefit into Medicare.”

“I will not vote to let the last train that leaves the U.S. Senate go out without $400 billion to be used to help vulnerable seniors and those who are getting crushed by prescription drug costs,” he said.

California’s other senator, Democrat Barbara Boxer, opposes the measure, contending that it does “great damage” to Medicare and is a “gift” to the pharmaceutical industry and HMOs because, among other things, it forbids Medicare to bargain for lower prices, her spokesman said Sunday.

In a Senate speech, Kennedy criticized the bill as an effort “to force senior citizens into the unloving arms of HMOs and insurance companies.... It asks the elderly to swallow unprecedented and destructive changes to the Medicare program in return for a limited, inadequate, small prescription drug benefit.”

“This bill is not a drug program for senior citizens,” Kennedy said. “It’s an attack on Medicare.”

The Medicare vote comes as Republicans scramble for two more votes to try to push another Bush legislative priority, an energy bill, through the Senate. The bill passed the House last week.

Frist said that if he could not round up two more votes by Tuesday, the energy bill was likely to be carried over until next year, a prospect that political experts said could spell its doom because of the difficulty of passing contentious legislation in an election year.

If gas prices climb or another power blackout occurs, “the Democrats are going to have to explain it,” Frist said.

On Friday, the GOP failed by two votes to get the 60 votes needed to overcome a threatened Democratic filibuster and force consideration of the measure. Opponents object to the bill’s cost and to a provision that would make it more difficult for their states to force the makers of a gas additive to pay the cost of cleaning up contaminated water supplies.

House Speaker J. Dennis Hastert (R-Ill.), on “Fox News Sunday,” blamed blockage of the bill on trial lawyers -- traditionally supporters of Democrats -- who have filed suit against manufacturers of the additive, methyl tertiary-butyl ether, or MTBE. He argued that because the use of antipollution additives in smoggy regions was mandated by Congress, the government should protect the industry from product-defect lawsuits.



Medicare legislation

Details of the Medicare bill, which is intended to provide senior citizens a prescription drug benefit and to overhaul the government-run health-care program.

Prescription coverage

Interim drug card: In 2004 and 2005, older Americans could buy a discount card that the Bush administration estimates would yield savings on drug costs of 15% or more. Low-income seniors would get an annual subsidy of $600 to further defray costs.

Main drug benefit: Beginning in 2006, Medicare beneficiaries could sign up for a stand-alone drug plan for an estimated premium of $35 a month. For the first $2,250 in drug costs each year, Medicare would pay 75% after a $250 deductible. Patients would be responsible for the next $2,850 in drug costs. Once seniors had paid $3,600 out of their own pockets for drugs, Medicare would cover 95% of the cost of subsequent prescriptions. The monthly premiums and annual deductibles would increase with inflation.

Low-income subsidies: The premium, deductible and coverage gap would be waived for people earning up to $12,123 a year. To qualify for the subsidy, seniors could have no more than $6,000 in fluid assets. The subsidies would be phased out between $12,123 and roughly $13,500 in yearly income.

Retiree coverage: Once the drug benefit begins, employers who maintain prescription drug coverage for retirees would receive tax-free subsidies, perhaps worth as much as

$70 billion.

Other changes

Role of private companies: Private businesses would administer the drug benefit on a regional basis. Private insurers that choose to offer basic health insurance would get $12 billion in subsidies. They would include preferred-provider organizations, which encourage use of certain doctors but allow patients to go elsewhere if they pay extra; and private fee-for-service plans, which allow patients to see any doctor.

Starting in 2010, traditional Medicare would face competition from private plans in six metropolitan areas in which at least two private plans enroll at least 25% of Medicare beneficiaries. For those who remain in traditional Medicare, premium increases would be capped at 5% a year and waived for low-income seniors. The competition would last six years.

The government would provide drug coverage in any region that did not have at least one stand-alone drug plan and one private health plan.

Rural health: Payments to rural hospitals and doctors, among others, would increase by about $25 billion.

Generic drugs: The ability of pharmaceutical companies to block cheaper generic equivalents would be restricted.

Drug importation: The ban on importing prescription drugs would continue. Drugs could be imported from Canada only if the Department of Health and Human Services certified safety, something it has declined to do. Hospital payments: Hospitals could avoid future cuts in payments by submitting data to the federal agency that runs the Medicare program. At the same time, payments through Medicaid to hospitals that serve a large number of disadvantaged patients would be increased.

Physician payments: Planned cuts in physician payments in 2004 and 2005 would be halted; instead, payments would increase 1.5%.

New benefits: Initial doctor appointment for new Medicare beneficiaries and screening for diabetes and cardiovascular disease would be covered, as would benefits for coordinated care for people with chronic illnesses.

Health-related tax savings accounts (health savings accounts): People with high-deductible health insurance policies -- at least $1,000 a year for individuals, $2,000 for couples -- could shelter income from taxes. Individuals younger than 65, employers or family members would make pretax contributions equal to the deductible, up to a maximum of $2,600 a year for individuals and $5,150 for families. Once individuals reach age 65, earnings and distribution also would be tax-free, provided the money is used for health expenses. Otherwise, a 10% penalty would apply.

Home health care: Would cut payments to home health agencies, but not require copayments from patients.

Cost containment: When general revenues constitute 45% of Medicare spending, Congress and the administration would have to review Medicare’s finances.


Source: Staff of Medicare bill negotiators


Times staff writer Vicki Kemper contributed to this report.