Today, a group of centrist House Democrats, led by Representatives Cal Dooley (Calif.), Jim Davis (Fla.), Ron Kind (Wisc.) and Ellen Tauscher (Calif.), announced a proposal for a universal, progressive and affordable Medicare Part B drug benefit.

Frustrated by Congress’ failure to pass a fiscally responsible prescription drug proposal that provides legitimate relief to seniors, the group developed an alternative proposal that can gain support from both sides of the aisle and re-ignite the stalled prescription drug debate.

"Our proposal represents the best chance to pass a meaningful prescription drug benefit for seniors this year.  It provides universal protection to all seniors and targets additional help to the sickest and poorest," said Rep. Cal Dooley (D-Calif.).  "Our proposal is a starting point – something that can be built upon to expand benefits as we move forward and additional resources are available."

The centrist proposal provides an affordable benefit that can be quickly implemented and offers the most help to seniors with high drug costs and low incomes, while ensuring that all seniors receive relief.  The plan incorporates the following key components:

Zero Premium: This benefit would be incorporated into the existing Medicare Part B program.  No separate premium and no increase in Part B premium.

Universal Eligibility: All Part B enrollees would receive coverage.

Universal, High-Deductible Drug Benefit: Medicare will cover 90% of the cost of drugs after beneficiary has spent $4,000 total on drugs.

Low-Income Benefits: Beneficiaries under 150 percent of poverty receive enhanced benefits via Medicare drug discount cards, Medicare + Choice, Medigap or other new coverage options.

Universal Benefit Via Discount Card Plans: Discount card offers all seniors access to the market-based discounts widely available to those with private insurance.  These discounts would apply to all drug purchases.

"While America’s seniors continue to struggle with the exploding cost of drugs, Congress’ partisan bickering over ineffective or fiscally impractical drug proposals has led to a break down in the prescription drug debate," said Congressman Jim Davis (D-Fla.).  "Today, we are jump starting debate on prescription drug reform by offering a fiscally responsible plan that provides legitimate relief to all seniors."

"The health and welfare of our nation’s seniors is simply too important to allow election year politics to prevent us from passing a fair and needed Medicare prescription drug plan," said Rep. Ron Kind (D-Wisc.).  "The plan we offer today is an affordable and sensible starting point that can break through the current legislative logjam and immediately provide seniors with the drug coverage they need and deserve."

"Our Medicare drug benefit proposal would provide needed assistance to millions of Americans in a fiscally responsible way.  I am encouraged that the Senate is considering a proposal similar to ours, and I remain hopeful Congress will approve a Medicare drug benefit plan this year," said Rep. Ellen Tauscher (D-Calif.).

With Senate action on prescription drug reform stalled, supporters of the centrist plan believe that this proposal could break the legislative logjam and provide seniors with the drug coverage they need and deserve.  There is growing interest on Capitol Hill for this type of proposal.

This group of House Democrats has discussed their plan with centrist members of the Senate.  U.S. Sen. Blanche Lincoln, D-Ark., a member of the Senate Finance Committee, said: "I appreciate Rep. Dooley and the House centrist Democrats for their leadership on this issue.  Their framework could very well serve as the basis for a bipartisan compromise in the Senate."

A number of centrist House Democrats, including Reps. Cal Dooley (Calif.), Jim Davis (Fla.), Ron Kind (Wisc.), Ellen Tauscher (Calif.), Charlie Stenholm (D-Texas) and Adam Smith (D-Wash.) have been working for months, in consultation with the Progressive Policy Institute, to develop the plan, and are in on-going discussions with Senate Democrats.

A one page summary of the proposal follows.

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• Zero Premium: This benefit would be incorporated into the existing Medicare Part B program.  No separate premium and no increase in Part B premium.

• Universal Eligibility: All Part B enrollees.

• Universal, High-Deductible Drug Benefit: Medicare will pay 90 percent of the cost of drugs after beneficiary has total drug costs of $4,000.

• Benefit Counts All Drug Spending: Negotiated drug costs – not just the beneficiaries' out-of-pocket spending – counts toward the $4,000 deductible.

• Low-Income Benefits: Beneficiaries under 150 percent of poverty will receive enhanced benefits via Medicare drug discount cards, Medicare+Choice, Medicaid, Medigap, and other new coverage options.

• Universal Benefit Via Discount Card Plans: Discount card plans – based on approval by Medicare – that offer all seniors access to the market-based discounts widely available to people with private insurance.  These discounts would apply to all drug purchases.

• Universal Benefit Via Current Coverage: Encourage the continuation of current drug coverage through Employer/Retiree plans, Medigap plans, Medicaid, State pharmaceutical assistance plans, or Medicare+Choice plans; all based on reimbursement agreements with Medicare.

• $20 Monthly Premium Discounts: A monthly premium discount will be provided to Medicare beneficiaries who enroll in Medicare+Choice plans, Medigap plans, or other plans that provide drug benefits worth at least $800 a year.

• Local Medicare Officials: Create local Medicare administrative areas, each with medical director and administrators to initiate budget-neutral disease management programs, encourage private plan participation in Medicare, improve health quality.

• More to Come: This proposal is just a first step in getting a Medicare prescription drug benefit up and running quickly – leaving room for expansion in the future.

COST: Preliminary estimate $350-$450 billion from 2004 through 2012 with generous low-income benefits.  About $30 billion less if started in 2005.  Request for CBO estimate is pending.

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