House GOP Prescription Drug Plan Clears Committee

The Bush administration is lining up behind a prescription drug proposal that would require seniors to pay a $35 monthly premium and meet a $250 yearly deductible.

But GOP leaders are facing stiff criticism that the plan leaves seniors dependent on private insurers and stuck with huge out-of-pocket costs.

Health and Human Services Secretary Tommy Thompson released an analysis Wednesday that his agency had done of the prescription drug plans offered by Democrats and Republicans. "Allowing for prescription drug coverage for seniors is the right thing to do and these Republicans are doing it," Thompson said at a news conference with GOP leaders.

The report was coming one day after the House Ways and Means Committee, in a 22-16 mostly party-line vote, approved the bill. Rep. Michael Collins, R-Ga., was the only Republican to vote against the bill.

The Energy and Commerce Committee began its consideration of the bill Wednesday morning, although a vote was not expected until Thursday.

The Bush administration analysis contends that the House GOP plan, which would cost $350 billion over 10 years, would give seniors a 60 percent to 85 percent savings per prescription and cut their out-of-pocket costs by as much as 70 percent. The analysis maintains that the competition from private insurers offering the drug benefit would push retail prices down even further and argues that the Democratic plans are too costly.

President Bush had proposed spending $190 billion on a drug benefit. Senate Democrats have proposed spending $500 billion over 10 years while House Democrats want to spend $800 billion.

The administration's endorsement came amid contentious hearings over the issue. The Ways and Means hearing dragged past midnight as Democrats unsuccessfully offered a slew of amendments.

The bill is expected to come up on the House floor for debate next week.

Under the plan as approved by the committee, all but low-income seniors would be required to pay a monthly premium of $35 and meet a $250 yearly deductible. The government would pay 80 percent of costs on the first $1,000 of drug costs and 50 percent on the next $1,000. Patients would be responsible for drug costs beyond that and would have to reach $3,800 in out-of-pocket spending before additional government help would kick in.

Democratic plans have lower premiums, deductibles and copayments.

Republicans said their plan is the only viable option since the nation's budget is already stretched.

"We are cutting through the rhetoric to tackle some of the most vexing issues facing Medicare today," said Rep. Billy Tauzin, R-La., chairman of the Energy and Commerce Committee. "This is a good bill."

Democrats and numerous advocacy groups disagree.

"It's clear that they are proposing a meaningless benefit that protects the pharmaceutical industry and ultimately leads to the privatization of Medicare," said House Minority Leader Dick Gephardt, D-Mo.

Only about $310 billion of the Republican bill is targeted for a prescription drug benefit. The remaining $40 billion would go to hospitals and doctors and to initiatives like physicals for every new Medicare beneficiary. The Democratic plans' money would be spent entirely on prescription drugs.

AARP Chief Executive Officer William Novelli said in a letter Tuesday that all the money should be used for prescription drugs. "This bill requires improvements before our members will provide their support," Novelli wrote.