House GOP Working on Prescription Drug Bill

By Susan Jones | July 7, 2008 | 8:26 PM EDT


(CNSNews.com) - House Republicans are urging the White House to work with them on a bill that would make prescription drugs cheaper for senior citizens, but President Clinton is already calling the GOP proposal "false hope for most."

Rep. Bill Archer, Chairman of the House Ways and Means Committee, said committee action on the GOP prescription drug legislation could come as early as next week.

Basically, the Republicans want private insurance companies to sell prescription drug policies to people on Medicare. Those insurance policies would be subsidized and approved by the government - an incentive for the insurance companies to offer the coverage.

"We believe the private sector can do a great job [but] the government will be there if necessary," said Rep. Bill Thomas (R-CA), who's helping to draft the bill.

Prescription drug coverage is expected to be a key election-year issue.

Rep. Thomas outlined the Republican plan Tuesday. He said the government would pay insurers 30-35 percent subsidies to make sure that new drug policies are affordable for everyone.

Low-income seniors would have their drug insurance premiums paid for directly by Medicare, and Thomas said in cases where no insurer enters an area, the government would act as the "insurer of last resort."

A new government agency called the Medicare Benefits Administration would oversee the various prescription drug coverage plans.

Under the Republican plan, patients would be able to choose among private plans, and their out-of-pocket expenses would vary, depending on which plan they pick.

As an example, Thomas estimated that with the help of government subsidies, an insurance company could offer a drug policy with monthly premiums of $35 to $40, a $200 to $250 annual deductible, 50-percent co-pays and catastrophic protection covering out-of-pocket charges after $5,000 to $6,000 in annual spending.

Republicans say their plan will particularly help low-income seniors and those with very high prescription drug costs.

President Clinton wants to create a standard prescription drug benefit under Medicare for anyone who wants it. Patients would pay a $26 monthly premium, which eventually would rise to $50 a month.

There would be no deductible, and like the Republican plan, the co-pay would be 50 percent. The government reimbursement would be $1,000 a year at first and then rise to $2,500.

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