Medicare: Selected Prescription Drug Proposals in the 107th Congress

Publication Date: October 2001

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health

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Abstract:

Medicare, the nationwide health insurance program for the aged and disabled, does not cover most outpatient prescription drugs. On several occasions, the Congress has considered providing coverage for at least a portion of beneficiaries' drug costs. The issue received renewed attention in the 106th Congress. However, there was no consensus on how the coverage should be structured.

The issue has again received attention in the 107th Congress. The FY2002 Budget Resolution provides $300 billion over the FY2003-FY2011 period for a Medicare reserve fund for Medicare reform and prescription drug coverage. A number of bills have been introduced, though at this writing no bill has been introduced or acted on by any of the three committees of jurisdiction (House Ways and Means, House Energy and Commerce, and Senate Finance). Given the events of September 11, 2001, it is unclear what action, if any, the Congress will take on this issue this year.

The drug provisions of Medicare proposals introduced in both the 106th and 107th Congresses contain a number of common themes. In general, they would make coverage available to all Medicare beneficiaries on a voluntary basis. They would place a limit on the amount of federal spending for the new benefit, thereby requiring beneficiaries (or their supplementary insurance) to pay the remaining costs. Further, they would provide assistance for low-income persons. However, there are a number of significant differences between the bills. These include the degree of reliance and financial risk placed on the private sector versus the public sector, the scope of benefits, and the federal administrative structure.

It is generally agreed that if Congress were to enact a drug benefit, it would take several years before the program could be implemented. As an interim measure, President Bush announced June 14, 2001, the creation of a Medicare Prescription Drug Discount program. This program would provide for the endorsement by Medicare of qualified privately-administered prescription drug discount cards. Beneficiaries could obtain these cards either free or for a nominal enrollment charge; the card would provide access to discounts on prescription drugs. While this plan would not establish a Medicare drug benefit, it was designed to give seniors access to similar kinds of discounts as are available to the under age 65 population under private insurance plans. However, on September 6, 2001, a federal district court judge issued a temporary injunction against implementation of the card program.

This report provides a side-by-side comparison of bills introduced in the 107th Congress that have received the most attention. To date these are S. 358, introduced by Senators Breaux and Frist, and S. 1135, introduced by Senator Graham et al. This report is a companion report to CRS Report RL30819, Medicare Prescription Drug Coverage for Beneficiaries: Background and Issues; that report includes a discussion of the major benefit design questions that would need to be addressed as the Congress develops a drug benefit. This report will be updated to reflect any legislative action.