Plans Improve Federal Workers' Drug Benefits

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Plans Improve Federal Workers' Drug Benefits

By ROBERT PEAR

New York Times, July 8, 2003

WASHINGTON — The House is expected this week to pass legislation ensuring that federal employees, including members of Congress, will have prescription drug benefits better than those available through Medicare when they retire.

The bill is being considered as House and Senate leaders begin trying to reconcile different versions of a measure to help Medicare beneficiaries pay for prescription drugs.

The new House bill says drug benefits for civilian federal retirees, who already have drug coverage, cannot be reduced to the level proposed for Medicare. An identical bill has been introduced in the Senate.

Federal workers and retirees receive drug benefits through the Federal Employees Health Benefits Program, widely cited by President Bush and members of Congress as a model for Medicare. The value of those drug benefits substantially exceeds the value of Medicare drug benefits in the bills passed last month by the Senate and the House.

Daniel C. Adcock, assistant legislative director of the National Association of Retired Federal Employees, said, "Our members fear that the government will be tempted to reduce or eliminate drug coverage for federal retirees, in favor of a Medicare plan that would be inferior and more complex."

The bills to protect current and future federal retirees were introduced late last month by Representative Tom Davis, Republican of Virginia, and Senator Daniel K. Akaka, Democrat of Hawaii.

House Republican leaders have indicated that they do not consider the bill controversial. It is on the House schedule for Tuesday under a procedure that allows 40 minutes of debate, forbids amendments and requires a two-thirds vote for passage.

Senator Akaka said the proposal would preserve the current level of drug coverage for federal retirees.

"They should not face a situation in which they must rely on Medicare," Mr. Akaka said.

Mr. Davis said the federal government should set an example for private employers to discourage them from dropping the drug benefits they already provide to retirees.

Scott A. Kopple, a spokesman for Mr. Davis, said, "There was concern that Congress or the U.S. Office of Personnel Management would attempt to save money in a future budget cycle by reducing retiree drug benefits, under the assumption that retirees could simply go into the Medicare program."

David Marin, another spokesman for Mr. Davis, said: "This is not about members of Congress protecting their own interests. It's about protecting the interests of retirees."

The Medicare legislation authorizes the biggest expansion of the health insurance program for the elderly since its creation in 1965, but it also gives private and public employers a powerful incentive to curtail drug benefits for retirees. The Congressional Budget Office has estimated that one-third of retired employees with employer-sponsored drug coverage could lose it as a result of the legislation.

Democrats say the new bill is evidence of hypocrisy. President Bush and other Republicans, they say, have endorsed drug coverage so inadequate that it is necessary to protect members of Congress and other federal employees against the possibility of receiving those benefits.

"Republicans tell seniors they will have the same benefits as members of Congress and other federal employees," said Representative Sherrod Brown, Democrat of Ohio. "But they tell federal retirees, `We won't put you into this inferior Republican Medicare plan.' "

The Davis and Akaka bills say the value of drug benefits offered to federal retirees must be "at least equal to" the value of drug benefits offered to active federal workers.

The most popular plan among federal workers is the Blue Cross and Blue Shield standard option. The Congressional Research Service estimates that drug benefits under that plan are worth about 50 percent more than the proposed Medicare drug benefits.

Medicare beneficiaries who buy free-standing drug coverage would, for example, pay higher co-payments and premiums than federal retirees typically pay. Medicare patients would have to pay all drug costs from $4,501 to $5,813 a year in the Senate bill or from $2,001 to $4,900 in the House version. Such gaps in coverage do not exist in the plans available to federal retirees.

Mr. Adcock said that any cut in drug coverage for federal retirees would break the bargain under which they had worked.

"The bottom line," he said, "is that this is an earned benefit — deferred compensation, no different from retirement income. Federal employees generally don't earn as much as private sector workers, but they make that sacrifice for the peace of mind of knowing they will have health coverage in retirement."

But Mr. Bush has suggested that Medicare beneficiaries should not accept less than what lawmakers receive.

"If it's good enough for the Congress," Mr. Bush said earlier this year, "it's good enough for the senior citizens of America."