Medicare: Side-by-Side Comparison of Selected Prescription Drug Bills

Publication Date: September 2000

Publisher: Library of Congress. Congressional Research Service

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Research Area: Health

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Abstract:

A number of bills have been introduced in the 106th Congress to establish prescription drug coverage for the Medicare population. On June 28, 2000, the House passed the Medicare Rx 2000 Act (H.R.4680, Thomas, et al.). The bill relies on private plans including Medicare+Choice plans to provide drug coverage; federal subsidies would be provided to encourage participation. There would be a maximum limit on beneficiary out-of-pocket costs ("stop-loss" coverage); and assistance would be provided to low-income seniors. The drug benefit and the Medicare+Choice program would be administered by a new Medicare Benefits Administration. The Congressional Budget Office (CBO) cost estimate for the new drug program is $37 billion over the FY2001-FY2005 period and $147 billion over the FY2001-FY2010 period.

There are several other proposals which have received considerable attention to date. These are the President's plan (S. 2342), the Daschle bill (S. 2541), BreauxFrist 2000 (S. 2807), the Graham/Bryan/Robb bill (S.2758) and the Roth bills (S.3016 and S. 3017). On June 24, 2000, the President announced several modifications to his drug plan including starting the program 1 year earlier and placing a limit on beneficiary out-of-pocket costs. The Congressional Budget Office (CBO) cost estimate of the revised proposal is $98.4 billion over the FY2001-FY2005 period and $337.7 billion over the FY2001-FY2010 period.

There are a number of common themes in many of the major prescription drug bills pending before the Congress. Most would make coverage available to all Medicare beneficiaries on a voluntary basis (though one approach would limit eligibility to those with low-incomes or high drug costs) They would all have a limit on the amount of federal spending for the new benefit. Further, they would all provide assistance for the low-income. There are major differences among the bills in how the benefits would be structured.

It is the degree of reliance placed on the public versus the private sector that characterizes one of the key areas of difference among the various proposals. All of the bills would place some measure of responsibility on the private sector for administration of a drug plan. Some bills would have the government assume all (or most) of the risk for providing the benefit while others would transfer more of the risk to the private entity. Another key difference among the plans is the scope of benefits to be provided. Under some bills a specified level of benefits would be available nationwide. Under other bills, a minimum benefit level would be established. The bills also designate different agencies to administer the new benefit at the federal level.

This report provides a side-by-side comparison of the key components of the major plans currently pending before the Congress. It is a companion report to CRS Report RL30584, Medicare: Selected Prescription Drug Proposals; that report provides more information on these major bills. Both reports will be updated to reflect any legislative action.