GOP Drives Medicare Prescription Drug Plan in House

By Christine Hall | July 7, 2008 | 8:28 PM EDT

( - House Democrats and Republicans are locked in a partisan battle over whose prescription drug benefit plan will be added to Medicare -- and which party will control the House after this year's election.

On a 22-16 vote Tuesday, the House Ways and Means Committee approved the Republicans' $350 billion bill. Rep. Michael Collins (R-Ga.) was the only Republican to vote against the bill.

By comparison, alternative Democratic plans would cost taxpayers anywhere from $500 to $800 billion over the next decade.

"With House Republicans marking up their bill today, it's clear they are proposing a meaningless benefit that protects the pharmaceutical industry and ultimately leads to the privatization of Medicare," said House Minority Leader Dick Gephardt (D-Mo.), speaking at a Capitol Hill press conference featuring liberal seniors' and women's groups.

"A retired federal employee wrote me [that] her prescription drug costs are so high that she has a very little to live on each month, so I had to move in with my son because I could not afford an apartment of my own," he said. "We need to pass a real Medicare prescription drug benefit for all seniors so that no one has to endure such hardships after a lifetime of hard work and service to their families and to our country."

The National Association of Manufacturers (NAM) praised the GOP plan.

"We strongly support this effort," said Neil Trautwein, NAM director of employment policy. "We are particularly pleased that the House GOP proposal relies on some of the same means employers use to manage their drug benefits.

"Medicare should more closely resemble the private sector, rather than the reverse," he said.

Aside from the cost to taxpayers, the main difference between the Republican and Democratic bills is the role of government. The GOP plan would allow seniors to buy the prescription drug insurance they want in the free market, whereas the Democrat plans would put the Medicare program in charge of access.

Liberal groups criticized the GOP plan for allowing seniors to rely on the marketplace for drug purchases. The groups also contend that the GOP plan doesn't spend enough.

"There is no guarantee that insurance companies will offer drug coverage in specific communities, and the Republican proposal allows insurance companies to define the coverage they offer in different locations," said Ron Pollack, executive director of Families USA.

"As a result, seniors will have no certainty about the premiums they need to pay, the cost-sharing they will bear, the drugs that are covered, and under what conditions they can obtain those drugs," warned Pollack.

Pollack added that the GOP plan also "provides very meager coverage and forces seniors to pay the lion's share of drug costs.

"Too many seniors will remain unable to afford the medicines they need," he said.

During the Ways and Means hearing, small groups of protestors interrupted committee chairman Bill Thomas (R-Calif.) three times with chants about the so-called "donuts," or gaps, in coverage under the Republican plan. The plan offers coverage up to $2,000 in drug costs but no coverage again until expenses top $4,900.

Tom Miller, health care analyst for the Cato Institute, says the reason for the donut was to gain the support of all seniors by offering first-dollar coverage, regardless of income.

"The donut first allows them to deliver benefits right away to most of the seniors," said Miller. "The fact is most of the seniors don't need [it] and shouldn't be getting them.

"But if you decide politically that's what you're going to do, ... it will make you seem like a wonderful person to folks who just want cheaper drugs and ... don't care how they get them and who pays," he said. "But in order to fit within the budget've got to take it away at a point at which it will get even more expensive."

Spending on outpatient prescription drugs rose 17 percent in 2001 to $154.5 billion, according to the National Institute for Health Care Management.

E-mail a news tip to Christine Hall.

Send a Letter to the Editor about this article.