Negotiations Begin on Resolving Differences in House and Senate Drug Benefit Plans

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Negotiations Begin on Resolving Differences in House and Senate Drug Benefit Plans

By ROBERT PEAR
New York Times, July 16, 2003

WASHINGTON - House and Senate negotiators met today for the first time in an effort to work out major differences on legislation to add prescription drug benefits to Medicare.

Representative Bill Thomas, Republican of California, who was elected chairman of the House-Senate conference, and Senator Charles E. Grassley, Republican of Iowa, said they were confident that the group would reach an agreement.

But one negotiator, Representative John D. Dingell, Democrat of Michigan, said, "I enter this with some feelings of trepidation."

The House bill, written almost exclusively by Republicans, and the bipartisan Senate bill both offer prescription drug benefits to the elderly and disabled and give private health plans a big new role in Medicare.

"If we get legislation out of this conference, which we will, it will be a victory for America's seniors," said Mr. Grassley, a principal architect of the Senate bill.

But Mr. Dingell, whose father helped write the original Medicare law in 1965, said, "The House bill helps insurance companies more than it helps seniors."

Mr. Thomas, the chairman of the Ways and Means Committee, said Medicare was already going bankrupt. "We want to meet the needs of seniors in a way that does not exacerbate the chance of going bankrupt," he said.

Lawmakers of both parties said they saw a political imperative to provide drug benefits to the elderly, an influential voting bloc. President Bush, who promised in the 2000 campaign to provide Medicare drug benefits, is urging Congress to send him a bill as soon as possible. But he postponed a White House session today at which he was to have given a pep talk to the negotiators.

Earlier today, one of the House Republican negotiators, Representative Tom DeLay of Texas, the majority leader, said the conference committee must preserve elements of the House bill intended to "hold down costs by introducing competition and choice for seniors."

"I can't see a bill coming out of conference that has less than that," Mr. DeLay said.

Republicans control the House and the Senate. Five of the nine Senate conferees and five of the eight House conferees are Republicans.

Senator Max Baucus, Democrat of Montana, a co-author of the Senate bill, appealed to the Republicans to seek a compromise that could win bipartisan support.

"If it passes narrowly, if it's a 51 percent strategy," Mr. Baucus said, "chances are that the follow-up will not work very well."

AARP, the big lobby for older Americans, issued a detailed commentary on the legislation today, and it objected to many provisions of the House bill.

William D. Novelli, executive director of AARP, urged Congress to "produce a better bill" than the measures approved by the Senate and the House on June 27. If a final agreement emerges from the conference committee but does not "correct serious problems that exist in both bills," Mr. Novelli said, "we will not hesitate to oppose it."

That statement, which could be read as a threat, was strong language for the cautious AARP.

Mr. Novelli urged the conferees to drop a provision of the House bill that would require traditional Medicare to compete with private health plans, starting in 2010.

Mr. Novelli said such competition could destabilize Medicare and significantly raise costs for older and sicker beneficiaries, who, he said, were more likely to remain in the traditional fee-for-service program. Moreover, he said, the negotiators should adopt a provision of the Senate bill, authorizing the government to provide drug benefits directly if insurance companies do not do so.

"The Senate provision is the minimum necessary to ensure coverage in all parts of the country," Mr. Novelli said.

Under both House and Senate bills, Medicare would pay subsidies to insurance companies to induce them to offer coverage for the drug costs of Medicare beneficiaries.

But Mr. Novelli said, "Stand-alone drug plans generally do not exist in the private market, and it is still unclear whether the insurance industry will view stand-alone plans as an attractive business opportunity."

AARP also criticized a provision of the House bill that would require beneficiaries with incomes exceeding $60,000 a year to spend more of their own money before they could qualify for protection against very high drug expenses.