House Republicans on Monday unveiled a $350 billion plan to help older Americans afford prescription drugs, staking out their position on an intensely lobbied issue that both political parties regard as pivotal in the fall elections to determine control of Congress.
Issued after months of internal debate over how to cope with soaring pharmaceutical costs and scant room in the federal budget, the GOP measure is the third major prescription drug plan to emerge on Capitol Hill during the past week. It recognizes keen voter interest in a drug benefit by including more money and broader coverage than House Republicans have favored in the past, but its provisions pale in comparison with the price and scope of the other two drug plans set forth by House and Senate Democrats.
House panels disagree
Both political parties and their special interest allies are trying to create momentum for their plan. Just a day after it became public, the House GOP plan is to be considered Tuesday by two House committees, even though their leaders disagree about the extent to which drug coverage should be accompanied by broader changes to Medicare and increased payments to health-care providers.
Two days before the GOP plan was released, Sen. Bob Graham (D-Fla.) denounced it as relying on “gimmicks and gotchas” that would make elderly patients “guinea pigs.”
Meanwhile, the plan’s main architect, Ways and Means Committee Chairman Bill Thomas (R-Calif.) accused Democrats of being “cynical enough to wave in front of seniors a program that is solely for a bumper-sticker campaign.”
The rhetoric reflects an urgent, election-year overlay to a cause that has bedeviled Congress for years. Public opinion polls have consistently shown that adding drug coverage to Medicare — the 1960s-era program that provides health insurance to Americans age 65 and older — would be one of the most popular things Congress could do. Yet, legislation has perennially become mired in partisan disagreements over how a drug benefit should be designed and how much it should cost.
This year, those intricacies are compounded by the parties’ political calculus.
Democrats, who are struggling to find a salient political issue, are encouraging their members to highlight their support for a prescription drug subsidy that is more generous than the GOP supports. Democrats are lobbying editorial boards, state parties and their own financial backers to help convince voters that Republicans will fail to provide cheaper drugs because the GOP is too closely aligned with companies that manufacture them.
Sensitive to polls suggesting that older voters trust Democrats on the issue by wide margins, Republicans are playing defense, searching for a proposal that GOP lawmakers can endorse without alienating older citizens, who vote in particularly large numbers and favor bigger subsidies than either party supports. In recent meetings, aides said, Majority Leader Dick Armey (R-Texas) has pleaded with Thomas to omit from the plan changes that could be construed as tinkering with a popular entitlement by tilting Medicare more toward the private sector.
House Republicans are preparing to pass their proposal in the next few weeks. After the legislation emerges from the Ways and Means and Energy and Commerce committees, House Speaker Dennis Hastert (R-Ill.) plans to have it reviewed by GOP leaders, who are assigned to delete language that could be politically problematic for Republican candidates, said a GOP leadership aide.
Energy and Commerce Chairman Billy Tauzin (R-La.) acknowledged that the party remains divided over a few issues, including subsidies for home health services. But Tauzin predicted that the party would come together with a unified proposal.
Plans’ cost disparities
The GOP bill would devote about $310 billion over the first decade to drug coverage, and another $40 billion to increase payments to doctors, hospitals and home health-care companies that treat Medicare patients. In contrast, a plan issued last week by Senate Democrats would cost $450 billion to $500 billion, while a House Democratic version would cost about $800 billion.
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Those differences in price translate into substantial differences in the help elderly patients would receive. Under the GOP plan, Medicare patients would pay a $250 deductible each year and a premium of approximately $35 per month. In addition, they would pay 20 percent of the cost of prescriptions up to a $1,000 limit, then 50 percent up to $2,000. Beyond that amount, they would receive no assistance unless their medicine bills exceeded $4,500 a year.
In contrast, the Senate Democratic proposal would have no deductible, while the House Democratic plan would charge a $100 yearly deductible. Both Democratic plans would contain a $25 monthly premium. The House version would require a 20 percent co-payment on prescriptions and limit patients’ expenses to $2,000 a year. The Senate one would set a limit of $4,000 and require co-payments of $10 for generic drugs and $40 for brand-name medicines.
Under the GOP plan, patients would buy insurance for drugs directly from private firms or through a managed-care plan. In the Democratic plans, a new drug benefit would be run through the existing Medicare program.
Republicans are already getting help from drug companies and other conservative groups that favor a private-sector orientation. The United Seniors Association, partly funded by the drug companies, is spending $4.1 million on ads in key House districts touting the GOP plan, according to Charles Jarvis, chairman of the group. Following the House vote, the group will run ads against key senators, he said.