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House Narrowly Adopts GOP Prescription Drug Coverage Plan

On June 28, the House narrowly approved, 217-214, a bill (H.R. 4680) that would provide prescription drug coverage for seniors. Sponsored by Rep. Bill Thomas (R-CA), the Medicare Rx 2000 Act would provide prescription drug coverage for Medicare beneficiaries through a private insurance plan or through a Medicare+Choice managed care plan.

Democrats spent most of the day protesting the rule, which prohibited them from offering a substitute. “This process, this rule is an outrage against the American people. I believe the other party is stooping to this level simply for politics. They are intent on passing anything that is called ‘prescription coverage’ in order to avoid the issue being raised in the November elections,” argued Minority Leader Richard Gephardt (D-MO).

Speaker of the House Dennis Hastert (R-IL) countered, “We should not vote for this out of a concern for political futures. We should vote for this out of the concern for our constituents who need our help in dealing with the high cost of prescription drugs….We should do this to help our mothers and our grandmothers and our neighbors down the street.”

Under the bill, seniors would pay an average monthly premium of $37, with a $250 deductible. After the deductible is met, seniors would pay 50 percent of their prescription costs up to $2,100. Seniors whose prescription drug costs fall between $2,100 and $6,000 would be required to pay the entire amount of the drug costs. At $6,000, the catastrophic threshold would be met and the insurance plan would pay for all drug costs over $6,000.

Seniors whose incomes are below 135 percent of the poverty line would have their entire premium subsidized by the federal government. For seniors whose incomes are between 135 and 150 percent of the poverty line, the federal government would provide a gradual reduction in the subsidy. The measure would also provide a subsidy to private insurers to cover 35 percent of the cost of providing the prescription drug coverage.

The Congressional Budget Office estimates that the bill would cost $38.6 billion over five years. That total falls below the amount included in the FY2001 budget resolution (H. Con. Res. 290), which set aside $40 million for the enactment of a prescription drug coverage benefit.

Following the Fourth of July recess, the Senate Finance Committee is expected to mark up a bill (as-yet-unnumbered) that would provide prescription drug coverage to seniors.

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