House approves drug insurance plan for seniors

Subsidies proposed to encourage insurers to aid Medicare patients

June 29, 2000|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON - Ignoring scathing criticism from Democrats who called it a sham, the Republican-led House late last night approved by a three-vote margin a $40 billion program that Republican leaders say will help older Americans buy prescription drugs.

The measure, approved on a 217-214 vote, will subsidize private insurance companies to encourage them to offer drug coverage to the 39 million Medicare beneficiaries. House approval represents the first major action on what both sides consider a critical election-year issue.

"It was a good day, we did the right thing," House Speaker Dennis Hastert said. "We've given seniors the ability to make sure they don't get cut short of having the drugs they need. We provided that for long-time security."

The Maryland Democratic delegation all voted against the measure. Constance A. Morella, of Montgomery County, was among a handful of Republicans who voted with the Democrats.

House passage sends the bill to the Senate, where it will compete with several other drug-benefit proposals, none of which may see final action this year because of the limited time left.

Democrats, who dragged out yesterday's debate with procedural delays that began with a protest walkout down the Capitol steps, argued that the bill was an election-year "fraud" that not even Republican leaders intend to become law. They asserted that the proposal would help very few people and might not work at all.

"The Republicans want to pass this now to avoid the issue being raised in the November election," said House Democratic Leader Richard A. Gephardt. "It's a hoax, it's public relations, it's a fig leaf."

The Democrats said their tactics were intended to protest the Republicans' refusal to allow a House vote on the Democrats' more generous - and expensive - drug-benefit proposal.

With control of the House hanging by a six-seat margin, Republican leaders acknowledged that they felt compelled to demonstrate concern about the rising demand for affordable drugs from older Americans, many of whom pay top prices for expensive drugs vital to their health. Two-thirds of retirees have little or no drug coverage because it is not provided through Medicare.

Republicans say their plan will make that coverage available through the private insurance market. A federal agency would be created to negotiate with private insurers to offer at least two plans in each community that beneficiaries could choose from. The low-income elderly would receive most of their coverage for free.

"Seniors will be given the right to choose, to voluntarily choose the drug plan that is right for them," said Rep. Bill Archer, a Texas Republican and chairman of the Ways and Means Committee.

But Democrats contend that under the plan, private insurers would be unwilling or unable to provide such coverage because they could not make any profit on it.

Republicans say their plan would provide higher subsidies, if necessary, to assure coverage for all Medicare beneficiaries. Democrats counter that such a tactic would serve only to encourage insurers to hold out for whatever price they want.

"Insurers themselves say the Republican plan won't work," President Clinton said yesterday. "The bottom line is their plan is designed to benefit the companies who make the prescription drugs, not the older Americans who need to take them. It puts special interests above the public interest."

Clinton and the House Democrats have proposed instead that drug coverage be included as a benefit administered through Medicare, assuring that the government sets the premiums and pays the bills.

The Democrats would offer a more generous "catastrophic" feature for patients with especially high drug expenses than would the Republicans. But the proposal would cost taxpayers more than twice as much as the Republican plan: $100 billion over five years.

"The problem I have with this whole thing is you cannot set up another benefit where the government has to pick up 100 percent of the cost," Said Rep. Collin C. Peterson of Minnesota, one of a handful of Democrats who supported the Republican plan.

AARP, the nation's largest advocacy group for retirees, declined to endorse either proposal, but welcomed progress in the debate.

"Short of lightning striking, this issue is not going to resolved this year," said Martin Corry, an AARP lobbyist. "What they are really doing is laying down a base for next year, and there's been progress on both sides of the aisle."

The Republican proposal would most benefit people not poor enough to qualify for Medicaid but with incomes 150 percent or less of the poverty level. Individuals earning up to $12,525 and couples earning up to $16,875 would have part or all of their premiums and deductibles paid by the government.

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