WASHINGTON - The nation's top Medicare official said yesterday that the Bush administration had "significant disagreements" with a bipartisan Senate proposal to add prescription drug benefits to Medicare, and he reaffirmed President Bush's desire to encourage elderly people to join private health plans by offering them extra drug benefits.
The official, Thomas A. Scully, welcomed progress in Congress toward passage of Medicare drug legislation. But he expressed major concerns about some features of the bill being drafted by the chairman of the Senate Finance Committee, Charles E. Grassley, an Iowa Republican; and the senior Democrat on the panel, Max Baucus of Montana.
First, Scully said, Medicare beneficiaries will not have a strong incentive to enroll in private plans if they can get coverage for outpatient drug costs through the traditional fee-for-service Medicare program, which now serves 88 percent of the 40 million beneficiaries.
Second, Scully said, he has doubts about whether private insurance companies will want to offer the type of drug coverage envisioned in the Senate bill.
The fee-for-service Medicare program already covers doctors' services and hospital care. Under the Grassley-Baucus proposal, beneficiaries could obtain drug coverage, as a separate item, from government-subsidized "prescription drug plans," which cover pharmaceutical costs and nothing else.
Stand-alone drug coverage "does not exist in nature" and would probably not work in practice, Scully has said.
Scully, the administrator of the federal Centers for Medicare and Medicaid Services, testified yesterday at a hearing of the Finance Committee, which plans to vote on the Medicare proposal next week.
`It's ambitious'
The Senate majority leader, Bill Frist, a Tennessee Republican, said he was determined to push the legislation through the Senate this month.
"It's ambitious," Frist said. "But it is a goal we will meet."
Grassley and Baucus would provide the same drug benefits to people in the traditional Medicare program and to those who join private health plans.
But Scully said, "We have significant disagreements" with that approach.
"We strongly prefer to have differential drug benefits," he told Republican Sen. Craig Thomas of Wyoming, who shares that view.
The House has twice passed Medicare drug legislation, in 2000 and 2002, and is expected to do so again this month. House Republican leaders have said that drug benefits should be equal, or nearly equal, in private plans and in the traditional government-run Medicare program.
