Details of the Senate and House bills that would add prescription drug coverage and make other changes to the Medicare program. The House and Senate versions will have to be reconciled before the final bill is sent to the president for his signature.
House: In 2004 and 2005, all seniors would be offered a drug card expected to offer modest savings on prescriptions. All seniors who do not have drug coverage would get $100 credited to their cards, with $500 credited to those near poverty and $800 to those with the lowest incomes. Seniors, family members, employers and others could make additional contributions to cards on a senior's behalf. The program would operate for only two years.
Senate: In 2004 and 2005, all seniors would get discount cards, with $600 credited to low-income seniors' cards.
Beginning in 2006, drugs would be subsidized for all Medicare beneficiaries who sign up for a stand-alone drug plan or who join a private health plan that offers drug coverage.
Premium:
House and Senate: Estimated at $35 per month, or $420 per year. Both waive or subsidize the premium for lower-income seniors, though the subsidies in the Senate bill are larger.
Deductible:
Senate: Individual must spend $275 before benefits begin.
House: Individual must spend $250 before benefits begin.
Initial coverage:
Senate: Insurance pays half of drug costs from $276 to $4,500.
House: Insurance pays 80 percent of drug costs from $251 to $2,000.
Coverage gap:
Senate: No coverage for drug costs between $4,500 and just over $5,800.
House: No coverage for drug costs between $2,000 and about $4,900.
Catastrophic coverage:
Senate: When out-of-pocket spending reaches $3,700, then 90 percent of drugs are covered.
House: When out-of-pocket spending reaches $3,500, then 100 percent of drugs are covered.
Impact on wealthy beneficiaries:
House: Individuals with incomes greater than $60,000 (and couples with income greater than $120,000) would have to spend more on drugs before the catastrophic coverage kicks in. The amount they would have to spend increases on a sliding scale, with those earning $200,000 required to spend $12,000 a year before the benefit begins.
Senate: No equivalent provision.
Medicare Part B deductible:
Senate: Increases the annual deductible for Part B — which covers doctors and out-of-hospital care — from $100 to $125 in 2006, and allows for increases every year after that with inflation.
House: Increases Part B deductible in 2004 to about $106 and allows it to rise each year as Medicare costs rise.
Role of private companies:
Senate and House: Both use private firms to administer the drug benefit. Both also allow new, private options for delivering basic health insurance. Those include preferred provider organizations (PPOs), which encourage use of certain doctors but allow patients to go elsewhere if they pay extra, and private fee-for-service plans, which allow patients to see any doctor.
House: Sets up competition between these private plans and the traditional, government-run Medicare system, beginning in 2010. Premiums would depend on how much each plan and how much the government spends on care.
Senate: Creates experimental program in 2009 that sets payments to PPOs through competitive bidding.
Rural health:
Senate: Would spend about $25 billion to increase payments to rural hospitals and doctors, among others. Many of the changes would not take effect until 2005.
House: Would spend about $28 billion to increase these payments, which changes beginning in 2004.
Generic drugs:
Senate and House: Speeds generic drugs to the market by limiting ability of pharmaceutical companies to block cheaper equivalents.
Drug importation from Canada:
Senate and House: Would allow individuals, pharmacists and wholesalers to import U.S.-made drugs from Canada, where they are sold for less because of the Canadian government's price controls. Both bills require the Department of Health and Human Services to certify that the imports would be safe and would save money, something HHS has declined to do. The House says it included additional guidance for HHS that could get the agency to change its mind.
Hospital payments:
House: Cuts future payments to hospitals. Hospitals would still see payments rise, though not as much as current law provides. At the same time, increases payments through Medicaid to hospitals that serve a large number of disadvantaged patients.
Senate: No similar provision.
New benefits:
House: Covers an initial doctor's appointment and blood lipid screening for the first time in Medicare. Waives deductible for colorectal cancer screening. Increases payments for doctors administering mammograms in hopes that more will be given.
Senate: No similar provision.
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