07-13-2002

HEALTH: Comparing the Plans

Bill


House Republican Bill, H.R. 4954


Price Tag: $350 billion over 10 years, with about $310 billion
specifically for prescription benefit.


What You Get: A senior who elects to participate has a choice of at least
two private drug plans, but benefits vary among the plans, with no
requirements as to which drugs are covered. Private health plans assume
most of the risk for high costs.


Who Pays: Senior pays an estimated $33 monthly premium and a $250 annual
deductible. After the deductible, Medicare pays 80% of drug costs up to
the first $1,000 and 50% of the next $1,000. After the senior has paid
$3,700 out of pocket in less than a year, all costs are covered.


Low-Income Subsidy: No premium or cost-sharing for seniors with incomes
below 150% of poverty level. Partial subsidy when income is between 150%
and 175% of poverty level.


Who's In Charge: Federal government establishes an independent agency
within HHS to administer the program, but private plans structure and
deliver the benefits, and set the premiums.


What Critics Want to Know: Is there a guaranteed minimum benefit? How high
can the monthly premium go? How greatly will seniors be affected by the
bill's gap in benefits before catastrophic coverage kicks in?


Prospects: House passed the bill on June 28 on a mostly party-line vote of
221-208. President Bush supports the bill; compromise with the
Democratic-controlled Senate will be difficult.


Senate Democratic Bill, S. 2625


Price Tag: $750 billion to as much as $1 trillion over 10 years, all for a
prescription benefit.


What You Get: Coverage is standard for all Medicare beneficiaries. There's
no restriction on choice of drugs, but a senior's share of the cost
depends on whether the drug is generic or is on a list of preferred
brand-name drugs. Medicare assumes all financial risks. All benefits
"sunset," or end, after five years.


Who Pays: Senior pays a $25 monthly premium, with no deductible. Senior
pays $10 for generics, $40 for preferred brand drugs, and $60 for other
brand drugs. Once a senior pays $4,000 out of pocket in less than a year,
Medicare picks up all costs.


Low-Income Subsidy: No premium or cost-sharing for seniors with incomes
below 135% of poverty level. Partial subsidy for seniors with incomes
between 135% and 150% of poverty level.


Who's In Charge: Government regional pharmacy- benefit managers would
manage, deliver, and administer the benefit, and would be accountable for
their performance in controlling costs and for providing quality care and
service.


What Critics Want to Know: What guarantee is there that Congress will
continue the benefit after it sunsets in five years? Should the bill do
more to modernize Medicare and provide more choices through private health
plans? How can Congress pay for such an expensive benefit?


Prospects: Senate is expected to vote on the bill during the week of July
15. Passage is likely, with mostly Democratic support, but compromise with
the GOP-controlled House will be difficult.


Senate Tripartisan Bill


Price Tag: Estimated $370 billion over 10 years, with $330 billion
specifically for prescription help.


What You Get: A senior has the choice of at least two private drug plans,
but the level of benefits varies, with no requirements as to which drugs
are covered. Medicare establishes a benchmark premium and picks up about
75 percent of excess costs, leaving the rest for health plans. Health
plans may adjust premiums, cost-sharing, and drug formularies, so long as
the value of the benefits is similar.


Who Pays: Senior pays an estimated $30-$35 monthly premium and a $250
annual deductible. After that, Medicare pays half of drug costs up to
$2,000. Medicare picks up all costs once a senior has paid around $4,500
out of pocket in less than a year.


Low-Income Subsidy: No premium or cost-sharing for seniors with incomes
below 150% of poverty level.


Who's In Charge: This private-sector model has health plans offering bids
to HHS and negotiating to provide a benefit. Much of the financial risk
remains with Medicare, but the benefit is delivered by private health
plans, which have great flexibility in designing benefits.


What Critics Want to Know: Is there a guaranteed minimum benefit? How high
can the premium go? How will seniors be affected by the bill's benefit gap
before catastrophic coverage kicks in?


Prospects: Senate moderates may use parts of the bill to find points of
compromise in the Senate, which will need 60 votes to pass any
prescription drug bill.


Marilyn Werber Serafini

National Journal