Senators Agree to Drug Benefit Compromise

The director of the agency that oversees Medicaid (search) and Medicare (search), Tom Scully, confirmed Friday the Bush administration's support for a new bipartisan plan for prescription drugs under Medicare.

The deal aims to provide drug coverage to all seniors regardless of whether they are on Medicare or a private plan. 

But Scully said he doesn't completely agree with a key aspect of the proposal.  In an address to the Senate Finance Committee, he acknowledged "some difference" with offering equal benefits to all seniors regardless of how they get their health care, but said the proposal is still "a step in the right direction."

Senate Minority Leader Tom Daschle, D-S.D., asked Scully, the lead witness in the Senate Finance Committee hearing, if breaks in the coverage made the proposal unfair. 

"There may be some gaps in coverage but $400 billion is a lot of money," Scully said, referring to the 10-year cost of the coverage. "Every single senior will do better than they do today," he said.

On Thursday, Sens. Charles Grassley (search), R-Iowa, and Max Baucus (search), D-Mont., chairman and ranking member respectively of the Senate Finance Committee (search), said their bipartisan "Medicare Advantage" program would get started in 2006. 

The plan would let seniors pay $35 per month for drug coverage, including both up-front and catastrophic protection. The plan would carry a deductible of $275, after which the individual would be required to pay 50 percent of the bill until total costs reached $3,450. From that point until costs reached $5,300, the individual would pay 100 percent of the bill. Beyond that level, insurance would pay 90 percent, and the individual 10 percent.

Seniors would be allowed to choose between Medicare or a private plan and the subsidy toward a prescription drug benefit would be equal, Baucus said.

"The benefit is equal for everyone, both in traditional Medicare and in the enhanced Medicare we're setting up," Grassley said at a press conference hailing the agreement.

Grassley said that while the White House hasn't given its full blessing, "there is much the administration supports in this plan."

White House spokesman Ari Fleischer said in a statement that Bush was encouraged by the agreement. "We have a real opportunity to get something done this year," Fleischer said.

At the same time, Bush, who had been hawking a plan that puts more seniors into a private program, stopped short of a full endorsement. 

"Unlike the president's proposal, we're not using carrots to entice or coerce seniors into plans that might not work for them," Baucus said.

Baucus said he expects a "good number of Democrats on and off the committee" to support the plan — but would not name any names.

Since the measure wouldn't go into effect for another two and a half years, seniors would be able to get a drug discount card that would offer savings of 15 percent to 25 percent.

Senate Majority Leader Bill Frist, R-Tenn., called the agreement "an important achievement" in the effort to improve Medicare and provide seniors with a prescription drug benefit. Frist said he would like to get a bill through the Senate by July 4.

The committee is expected to reveal the bill at its meeting next Tuesday and work on getting the bill ready for a vote next Thursday.

In other efforts to make drugs more available to seniors, Sen. Judd Gregg, R-N.H., chairman of the Senate Health Education, Labor and Pensions committee, said he wants to increase access to generic drugs by limiting some practices used by the manufacturers of brand-name drugs to keep cheaper generic competitors off the market.

He proposes a plan that would restrict efforts to extend patent rights by employing small changes in the brand names that make it unique.

Gregg said passage of the bill could save the government billions of dollars a year that it pays out to pharmaceutical companies for their brand names.

Gregg is planning to hold a hearing next week on the plan and said if it passes as part of a Medicare reform measure, it could go into effect by this summer.

Fox News' Julie Asher and The Associated Press contributed to this report.