House, Senate Must Agree On Single Rx Plan

No doubt the passage of prescription drug benefit bills by both the House and Senate last Thursday was historic and long overdue. But the issue is far from settled because there are major differences in the two plans, and the countrys seniors will not have a clear idea of what benefits they will be receiving until both houses of congress agree on a single measure, with identical provisions. That’s the law, and officially what is meant by the phrase "enacted into law"—the same bill exact word for word, is approved in each chamber and sent to the president for his signature.

However, there are some things that appear certain about both plans. For one, President George W. Bush must be credited with helping to get bills passed, although it appears that the final outcome will not prove to be a great monetary savings for seniors. The 40 million seniors in Medicare will see some general savings but the amount will not be anything to cheer about.

The Republicans wrote the bills that passed in both chambers. One of the basic premises in the House bill is that private insurers who will provide only drug coverage will be heavily involved in administering the plan although there will be competition from the traditional Medicare plan, continuing the role Medicare has played in providing health care. Some seniors will still get their drug benefits through HMOs.

The differences between the House and Senate drug plans are:

•Deductible: House $250; Senate $275.

•Basic coverage: House, Medicare pays 80 percent of drug costs from $251 to $2,000 a year; beneficiary pays the other 20 percent; beneficiary pays a maximum of about $350 for this phase of coverage.

Senate, Medicare pays half of drug costs from $276 to $4,500 a year, beneficiary pays the other half. Beneficiary pays a maximum of $2,112 under this part of coverage.

•Coverage gap: House, beneficiary must pay for all drug costs from $2,001 to $4,900 a year, or $2,899 maximum.

•Coverage gap: Senate, beneficiary must pay for all drug costs from $4,501 to $5,813 each year, a $1,312 maximum for individual beneficiary.

•Catastrophic coverage: House, Medicare pays 100 percent of drug costs exceeding $4,900 a year, beginning when beneficiary’s out-of-pocket costs on prescription drugs reaches $3,500 a year.

•Senate, Medicare pays 90 percent of drug costs over $5,813 a year, beginning when beneficiary’s out-of-pocket costs for prescription drugs reaches $3,700-a-year.

•House: beneficiaries with annual incomes of $60,000 must spend more of their own money before they qualify for catastrophic drug coverage. The limit on out-of-pocket spending would rise with income above $60,000 a year.

Senate, no special provisions regarding higher-income beneficiaries

The House bill encourages people to set up two types of tax-exempt personal savings accounts to help pay medical expenses. The Senate bill does not include this provision.

One congressmember said the Republicans included this provision as a tax shelter for the wealthy; another Democrat charged it would encourage employers to reduce their employees’ health coverage.

It was not clear how the proposed new drug prescription plans would affect individuals who receive drug coverage under pension and retirement plans or state-run plans such as the New York state EPIC drug discount program.

SEEK IMPROVED BENEFITS: Assemblymembers Margaret Markey (Maspeth) and Michael Cohen (Forest Hills), report that bills they supported which would improve rent and tax exemptions for seniors were passed by the Assembly and state senate and are awaiting consideration by the state senate.

One bill increases income eligibility for the Senior Citizens Rent Increase Exemption program (SCRIE) from $20,000 to $24,000, making more seniors 62 or older eligible for rent increase exemptions.

Another bill also increases income eligibility for low-income seniors 65 or older who are property owners. The income ceiling is raised from $21,500 to $24,000 to secure a 50 percent property tax exemption. Seniors with annual income from $24,000 to $32,399 would secure exemptions from 45 percent down to 5 percent.

Markey (D) commented, "These increases, which have not been authorized in the last eight years, will be long overdue for our senior population. Every time senior citizens receive a cost-of-living increase from either Social Security or their pensions, they risk losing their eligibility."

Cohen said, "Without passage of these three bills, thousands of low-income seniors and disabled residents who receive small cost-of-living increases in their pensions or benefits would be forced out of their homes or apartments. I urge the governor to swiftly sign these legislative measures into law."

The only discordant note sounded by Cohen was the failure to pass a bill which would have granted eligibility to participate in the SCRIE program to renters with disabilities.