Another round in what many see as the most important congressional debate on health policy since 1994 opened on July 15 when the Senate began a scheduled two-week debate on competing plans to provide prescription drugs for some 40 million Medicare beneficiaries.

In a telephone press conference on July 16, AFL-CIO Executive Vice President Linda Chavez-Thompson called prescription drug coverage “the most important and most needed change in Medicare in decades,” adding that the legislation rammed through the House of Representatives last month “is a gift to the HMOs and insurance companies.”

That legislation provides some $300 billion over 10 years for subsidies to insurance companies as an inducement to provide insurance to cover the cost of drugs. Critics say it would cover only about one-fifth of expected drug costs for the elderly in the next decade.

The House bill is one of three proposals vying for the 60 votes necessary for any plan to make its way to the Senate floor for an up or down vote. In addition to the House legislation the Senate is considering the Graham-Miller Bill authored by Sens. Ted Kennedy (D-Mass.), Bob Graham (D-Fla.) and Zell Miller (D-Ga.), the Grassley Bill authored by Sen. Charles Grassley (R-Iowa) and the “tripartisan” bill authored by Sen. John Breaux (D-La.) and co-sponsored by Sen. James M. Jeffords (I-Vt.), together with three Republican senators, Orrin G. Hatch of Utah and Olympia J. Snowe and Susan Collins of Maine.

The Graham-Miller Bill would make prescription drugs an integral part of Medicare just as are doctor and hospital visits. Beneficiaries would pay a monthly premium and the 80-20 payment “split” as in the present system. The Grassley plan, like the one that cleared the House, provides subsidies to insurance companies, has a higher monthly premium and other costs that will push the price of prescription drugs beyond the reach of many.

The tripartisan measure has many similarities with the Grassley bill. Breaux has always championed changes in Medicare that would allow “voucherization” of the system by providing federal funds to insurance companies who agree to provide beneficiaries with a choice of plans. His last effort failed in 1999 when he was unable to muster the necessary 11-vote majority from the 17-member Commission of the Future of Medicare that had been appointed by President Clinton to recommend changes in the program. Congressional sources say the Graham-Miller option would cost $500 billion from 2004 to 2010 while the Grassley measure would cost $370 billion from 2005 to 2012.

Chavez-Thompson said the “closest existing relative” to privatizing prescription drug coverage for seniors was the Medicare + Choice program. “Since 1998, these managed care plans dropped coverage for 2 million seniors and essentially abandoned them. Even more seniors were forced to accept fewer benefits and higher prices,” she said. “Congress should not gamble on the well being of our seniors by trusting HMO-style insurance companies to operate with our best interests in mind.”

Ron Pollack, executive director of Families USA, was equally critical of the Grassley proposal, which, he said, “falls short in three major areas: It does not guarantee drug coverage for America’s seniors, millions upon millions of seniors would remain unable to afford the medicines they need. The Grassley plan fails to take any specific steps to put the brakes on skyrocketing drug prices.”

Although both the AFL-CIO and Families USA see the Graham-Miller Bill as the vehicle for winning a meaningful prescription drug benefit for seniors, the 2.5 million-member Alliance of Retired Americans has many reservations.

“We are not happy with the Graham-Miller Bill for several reasons,” Betty Cooper, ARA publications director, told the World. “We don’t think seniors should have to pay more than 20 percent of the cost of drugs and Graham-Miller fails there. And we are concerned that out-of-pocket expenses in the legislation will leave many beneficiaries out in the cold.”

Cooper said the ARA would work to improve the Senate bill to bring it more in line with legislation proposed by House Democrats. “No bill is better than a bad bill,” she said, alluding to the fact that it took nearly 20 years for Congress to enact legislation making farmers and self-employed individuals eligible to participate in the Social Security System.

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Fred Gaboury
Fred Gaboury

Fred Gaboury was a member of the Editorial Board of the print edition of  People’s Weekly World/Nuestro Mundo and wrote frequently on economic, labor and political issues. Gaboury died in 2004. Here is a small selection of Fred’s significant writings: Eight days in May Birmingham and the struggle for civil rights; Remembering the Rev. James Orange; Memphis 1968: We remember; June 19, 1953: The murder of the Rosenbergs; World Bank and International Monetary Fund strangle economies of Third World countries