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Senate Rebuffs Bid to Close a Gap in Medicare Drug Coverage

By ROBIN TONER and ROBERT PEAR

New York Times, June 25, 2003

WASHINGTON - The Senate rejected a Democratic effort yesterday to make a new Medicare drug benefit more generous by closing a substantial gap in coverage for elderly people with high drug costs.

Republicans argued that the Democratic proposal was unaffordable because it would have added $64 billion to a bill that already costs $400 billion over 10 years. They prevailed by a vote of 54 to 42.

It was one of a series of votes today in which Democrats tried to highlight what they assert are serious shortcomings in the bipartisan Senate legislation. In nearly every case, Republicans held fast and defeated the amendments, with help from a handful of conservative and centrist Democrats.

The Senate did accept one amendment, by Senator Mark Dayton, Democrat of Minnesota, saying that the value of drug benefits for members of Congress in 2004 could not exceed the value of the new drug coverage for Medicare beneficiaries the legislation creates. That provision, which does not exist in the House bill, passed by a vote of 93 to 3.

Drug benefits for members of Congress are substantially more generous than those provided under the bill. Mr. Dayton said his purpose was to give lawmakers a "taste of their own medicine."

The Senate and the House are both pushing toward votes later this week on legislation that calls for the biggest overhaul of Medicare since its creation in 1965.

In the House, Republicans said today that their bill would include a provision to give consumers swifter access to low-cost generic versions of brand-name prescription drugs. The Senate voted last week to include such a provision, so the House move means the final bill will probably contain it.

Behind the scenes in the Senate, sponsors of the Medicare bill struggled to resolve tensions between conservative Republicans, who sought more money to promote the involvement of private health plans, and Democrats who were resisting any tilt toward the private sector. Senator Charles E. Grassley, Republican of Iowa, an architect of the legislation, said he believed the two sides were making progress on a deal that would put $6 billion more into the private plans, and another $6 billion into traditional fee-for-service Medicare, as the Democrats seek.

In essence, the two sides could explore two different ways of delivering health care, to determine which is more efficient and popular with elderly beneficiaries.

Trying to maintain the momentum, the Bush administration sent its top health officials to the Senate Republicans' lunch today, and they emerged to declare that victory was close at hand.

"We're very optimistic that it'll pass both houses of Congress this week," said Tommy G. Thompson, the secretary of health and human services.

In fact, Senate strategists said, much of the current maneuvering involves efforts by the two parties to stake out positions for when the differing House and Senate versions go to a conference committee to be resolved.

The bill advancing in the House goes further than the Senate bill in promoting competition between private health plans and traditional Medicare. The House bill is thus unacceptable to many Democrats, who describe it as an effort to privatize the program.

The Senate rolled through a series of amendments today, including one that would have eliminated a so-called coverage gap.

Under the Senate bill, a Medicare beneficiary would typically pay a $275 deductible and 50 percent of the cost of drugs up to $4,500 a year. At that point, coverage stops and the beneficiary is responsible for the next $1,300 of drug costs. Coverage is restored at $5,800, and Medicare would then cover 90 percent of drug costs above that level.

Sponsors of the bill said the gap would affect only a small proportion of beneficiaries.

But Senator Barbara Boxer, Democrat of California, backed by AARP and other retiree groups, asserted: "This is a real terrible problem for our people. Just when they need help the most, they stop getting it." Later today, the Senate rejected another effort to narrow the coverage gap.

The Senate also rejected an amendment that tried to require drug companies to sell their products in the United States at the same prices they charge in Canada.

The Senate also turned down two Democratic amendments to create incentives for employers to continue providing drug benefits to retirees. The Congressional Budget Office has said many employers would curtail such coverage if drug benefits were available through Medicare. Again, opponents of the amendment cited scarce resources.

Senators spent much of the day discussing the proposed compromise that would split $12 billion between private plans and traditional Medicare. Thomas A. Scully, administrator of the federal Centers for Medicare and Medicaid Services, said, "This seems to be a very reasonable compromise."
Senator Jon Kyl, Republican of Arizona and a leading conservative, argued that the enhanced payments to private plans would give them a reasonable "chance to succeed" in the Medicare market.

In the House, Republican aides said the provision of their bill relating to generic drugs would be similar to the one approved last week in the Senate. Both provisions would limit the ability of brand-name drug makers to delay federal approval of competing generic drugs.

A bipartisan group of House members, led by Rahm Emanuel, Democrat of Illinois, and Jo Ann Emerson, Republican of Missouri, seeks action on generic drugs and on other steps to cut prices for medicines.