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Senate Dems Sign Off on Smaller Drug Benefit

Senate Democrats are set to announce next week that they have reached agreement with GOP members on a Medicare prescription drug coverage plan for low-income seniors and those with significant drug bills.

Final details of the deal were being sorted out by Sen. Bob Graham, D-Fla., who helped shape the larger Democratic proposal, and Sen. Gordon Smith, R-Ore.

"This new bipartisan plan will help all seniors buy prescription drugs but it will give the greatest help to the most vulnerable older Americans, those with lower incomes and with the most serious health problems," said Graham.

Democrats aren't overwhelmed by the compromise deal, and wanted a larger benefit paid out but said that they were up against a wall to get some relief to seniors.

"There are those that believe we need a down payment of some form or shape even if it has to be a catastrophic proposal," Sen. Edward Kennedy, the chairman of the Senate Health, Education, Labor and Pensions committee. "Certainly, I think at this point, the majority of Democratic members feel that way."

Kennedy said the proposal will cost between $400 and $450 billion over 10 years and would cover about half of the 40 million senior citizens on Medicare. That's the middle road between the $594 billion plan Senate Democrats tried to push earlier this week and a $370 billion proposal offered by a coalition of Republicans, a Democrat and the Senate's lone independent.

Both those measures needed to get 60 votes for passage. Neither came close.

The compromise does allow Medicare to administer the drug coverage benefits, something that Republicans had opposed, opting instead for private insurers, said a Senate Democratic aide, speaking on condition of anonymity.

According to Senate Democratic aides, all seniors but low income beneficiaries — marked as elderly with incomes below 150 percent of the federal poverty level — will pay a $25 annual enrollment fee.  But there will be no monthly premiums or deductions.

Low-income seniors will get full coverage with nominal co-payments. Other seniors will get at least 5 percent of costs paid by the government. Once seniors reaches $4,000 in drug costs, they will not have to pay anything else for that year.

The proposal is likely to be offered as an amendment to a bill easing access to generic drugs that has been the foundation for this week's debate.

The Senate departs for its month-long recess at the end of next week, and aides said that lawmakers want to get a deal done before they leave.

The Associated Press contributed to this report.