The Medicare prescription drug plan allows private health insurers to offer limited insurance coverage of prescription drugs...Read more
House, Senate Pass Medicare Bills Offering Drug Benefit
- July 1st, 2003
Both the House and Senate have approved Medicare bills that call for a prescription drug benefit and a larger role for private health plans in the program. Senate Majority Leader Bill Frist (R-Tenn.) said, "Tonight, we are one step closer to providing real health security for seniors all across the nation." But referring to his chamber''s bill, Rep. John Dingell (D-Mich.) said, "[The bill] destroys Medicare as we know it."
Under both bills, the prescription drug benefit, which would be delivered by private insurance companies and would not take take effect until 2006, contains a large coverage gap some have dubbed the "doughnut hole."
The Senate bill provides for coverage of 50 percent of a beneficiary's drug costs up to $4,500, with a $275 deductible and an estimated $35 monthly premium. After $4,500 has been spent, coverage stops until $5,800 (a 'doughnut hole' of $1,300), at which point catastrophic coverage kicks in and 90 percent of all drug costs are covered from then on.
The House bill provides for coverage of 80 percent up to $2,000, with a $250 deductible and an estimated $35 monthly premium. Once $2,000 has been spent, coverage stops until drug bills reach $4,900 (a doughnut hole of $2,900), at which point catastrophic coverage kicks in and the government covers 100 percent of all costs from then on.
House Democrats offered an alternative measure that would devote more than twice as much money to drug subsidies, but it was defeated.
Medicare beneficiaries and others can enter their annual prescription drug expenses in the Kaiser Network''s Medicare Drug Benefit Calculator to determine their out-of-pocket expenses under the House and Senate Medicare drug benefit proposals.
The House and Senate bills rely on a new, largely untested product to deliver drug coverage to people in traditional Medicare: private stand-alone insurance policies that provide only drug coverage.
Conference committee negotiations, expected to begin after the July 4 recess, could be difficult because the House and Senate bills differ in important ways. For instance, the House bill would eventually require direct competition between traditional Medicare and private health plans, a goal many conservatives favor. Senate Minority Leader Tom Daschle (D-N.D.) warned that the bipartisan agreement in the Senate could "fall apart" if the Senate bill is significantly altered during conference committee.
According to the The Washington Post, both bills would allow U.S.-made drugs to be imported back from Canada, which regulates the prices of prescription drugs, if the Department of Health and Human Services agrees.
Click on links to read articles in The New York Times and The Washington Post on the Medicare bills. (Articles may be only temporarily available, and free registration required for the Times article.)
Local Elder Law Attorneys in Ashburn, VA
Margaret A. O'Reilly, PC
Margaret A. O’Reilly is an estate planning and elder law attorney with over thirty-five years of legal experience. Attorney O’Reilly graduated from Duke University with a degree in psychology, and received her law degree from Northeastern University School of Law in Boston, Massachusetts. For over 15 y...
Law Offices of John L. Laster
John Laster is a lawyer licensed to practice in Virginia, Maryland and the District of Columbia. He limits his practice to wealth transfer planning, trusts, wills, powers of attorney, health care decision-making issues, estate administration and related tax, elder law and disability concerns. Listed in The Best Lawyers...
Ron M. Landsman, P.A.
Ron M. Landsman has been practicing elder law since 1983, before it was known as elder law, originally with Landsman and Laster, Washington, D.C., then Landsman, Eakes and Laster, also in Arlington, VA, and since 1990 in his own practice in Montgomery County, Maryland. He has been among the most active members of the...