WASHINGTON -- Under pressure to respond to the high cost of prescription drugs, Republican congressional leaders are scrambling to shape a plan for offering a drug benefit through Medicare.
House Speaker Dennis Hastert announced yesterday the outlines of a proposal that would offer drug coverage through the private marketplace to all Medicare beneficiaries -- and pay the premiums for the low-income elderly.
"I believe that this plan will help lower the costs of prescription drugs for many senior citizens," Hastert declared at a news conference on the Capitol steps. "No American should be forced to choose between putting food on the table and taking life-saving prescriptions drugs."
Republicans in the House plan to promote the plan during the Easter recess.
Meanwhile, House and Senate leaders agreed to provide $40 billion for Medicare improvements over the next five years, most of which Hastert said would help pay for the drug benefit.
Final action on the complex issue is considered unlikely this year. The House leadership bill is still so sketchy that final details are not expected to be available for weeks, and competing proposals are floating in the Senate.
GOP budget negotiators even disagree on whether to earmark money for the drug benefit within the $40 billion category of Medicare reform. The Senate version sets aside $20 billion; the House version does not specify how the $40 billion should be spent.
But both parties have acknowledged that Congress will have to act soon to address the lack of a drug benefit in the 35-year-old Medicare program.
"I think this will be one of the central issues of the fall campaign," said Sen. Gordon Smith, an Oregon Republican who is co-sponsoring a drug benefit proposal in the Senate. "A lot of Republicans would like to be seen as part of the solution."
Many Republicans say that unless they appear to be trying to help the one-third or more of elderly Americans who have no coverage for the drugs that are increasingly vital to their health care, voters may prefer Democrats, many of whom support the broader benefit proposed by President Clinton. The president's plan calls for a drug benefit to be built directly into the Medicare program and would not rely on private insurers.
House Democrats, who say they are on the verge of winning the six seats they need to regain control of that chamber, have declared their intention to make prescription drug coverage a top issue in the November elections.
"There's no question that we wanted to get this out today so our members will have something to talk about when they go home for the break," John Feehery, a spokesman for Hastert, said of the House Republican plan.
The Republican leadership proposal would encourage private insurers to offer drug coverage to Medicare beneficiaries by subsidizing the poorest participants and those facing the highest costs.
Like Clinton, House Republicans would cover the entire cost of beneficiaries with incomes up to 135 percent above the poverty level. They would provide gradually diminishing subsidies to those up to 150 percent above the poverty level.
No specific subsidy would be provided to those with higher incomes. But Republican leaders argue that premiums for those beneficiaries would be effectively subsidized because people with "catastrophically" high drug costs would also receive federal help and would thus be removed from the risk pool for the insurers.
Rep. Richard A. Gephardt, the House Democratic leader, said yesterday that he was pleased to see the Republicans offer a prescription-drug plan but warned that "no one should be fooled into thinking that this proposal measures up to the standards America's seniors are demanding."
"The Republican proposal contains no guarantee that the private benefit plans they envision will be available at all," he added. "And if private companies actually decide to write these policies, there is no guarantee they will be either meaningful or affordable."
Money from surplus
According to the budget blueprint developed by the Republican-led Congress, the money for Medicare would come entirely from the budget surplus, which is estimated to reach nearly $2 trillion over 10 years -- not counting an additional $2 trillion in surplus Social Security revenue.
Like the rest of the $1.8 trillion budget plan, the Medicare provision is not binding on Congress or on Clinton, whose signature is not required on the document. House negotiators rebuffed a Senate provision that tried to force action on the issue by Sept. 1.
Many lawmakers are wary of rushing to add a costly new benefit to Medicare without taking steps to control costs.
Such steps, which might call for higher premiums and co-payments, would be especially difficult to pass without the sweetener of a new drug benefit.
"The question is: Can we get it done this year, or do we get enough done this year to finish it early in the next session?" said Sen. Larry Craig of Idaho, who is part of the Senate Republican leadership.