Demos unveil drug benefit plan

Congressional Democrats announced that they plan to introduce legislation to provide a Medicare prescription drug benefit modeled on President Clinton's proposal to create a government subsidized and administered benefit. Details were not released, but a summary of the Senate bill indicates that the legislation would create a benefit, called Medicare Part D, that when fully phased in would cover 50 percent of drug costs up to $5,000 for beneficiaries with incomes greater than 150 percent of poverty level. Medicare recipients with incomes up to 135 percent of the poverty level would receive a 100 percent subsidy for all Part D costs. The Part D benefit is expected to cost about $24 per month. The proposal also dedicates $50 billion over 10 years to catastrophic coverage, and is expected to cover out-of-pocket expenses that exceed $3,000-$4,000.

According to a summary of the House bill, Part D would pay for half of drug costs up to 50 percent of $2,000 in 2002-2004, $3,000 for 2005-2006, $4,000 for 2007-2008, and $5,000 for 2009. Recipients would be responsible for 100 percent of costs above these totals unless they fell below the 150 percent of poverty level. The limits would be adjusted in succeeding years for inflation. In 2002 a catastrophic benefit would be implemented that limits a beneficiary's maximum out-of-pocket costs to approximately $3,000 per year adjusted for inflation. ...