Senator Drafts Drug Benefit Compromise

WASHINGTON —  In an attempt to reach compromise on a politically charged issue, the chairman of a key Senate panel is drafting a Medicare prescription drug plan that would share costs between the government and senior citizens.

Senate Finance Committee Chairman William V. Roth Jr. (R-Del.) planned to circulate the proposal today in hopes of reaching middle ground between President Clinton’s large new government entitlement plan and the House GOP’s bill based on subsidized private insurance.

Democratic and Republican sources, speaking Tuesday night on condition of anonymity, said that under Roth’s emerging plan the government would share prescription drug expenses with Medicare recipients above a certain deductible amount. One deductible amount being discussed was $500, but that was subject to change.

Above the deductible, the sources said, the government would pay half of all drug costs up to another level--one preliminary figure was $3,500--and as much as 80% of the costs above that.

This would appeal to GOP conservatives who want a co-payment in order to hold down the program’s size and cost.

The plan would use benefit managers, much like health insurers do, to buy drugs and design services at the lowest possible cost. It would also provide subsidies for low-income people to buy drugs.

In addition, Roth envisions changes to the current Medicare Part A and Part B programs as they affect hospitalization. Under current law, Medicare recipients must pay a $776 deductible per hospitalization and a $100 deductible for services under Part B.

The Roth proposal would combine both deductibles into one--the amount hasn’t yet been decided--and people on Medicare would get a full 365 days of hospitalization with no other co-payment. Currently, there is a tiered system of co-payments.