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How the New Medicare Prescription Drug Bill Affects Public Retirees
Madeline Smith,
House Ways and Means Subcommittee on Health
Kate Leone,
Office of Sen. Tom Daschle (D-SD)
Two C apitol Hill experts in Medicare legislation offered starkly contrasting views of P.L. 108-173, the Medicare prescription drug law Congress approved last December. The law offers the largest expansion of Medicare benefits since its creation in 1965, but has been criticized by Democrats and Republicans because of coverage gaps and delays in coverage.
The standard benefit, which becomes effective in 2006, offers a prescription drug benefit for a $35 monthly premium. There is a $250 annual deductible, with 75% coverage up to $2,250. The law offers no coverage between $2,250 and $5,000 and requires an individual to pay $3,600 out of pocket before the benefits begins to pay 95% of drug costs.
Smith, a staffer who works for House Ways and Means Chairman Bill Thomas (R-CA), said that the law offers numerous improvements. She emphasized that whatever limitations it has, the law represents the first prescription drug coverage many Medicare beneficiaries have ever had. The coverage will be particularly valued, she believes, by anyone who loses their private sector employer health insurance coverage.
In  contrast, Kate Leone, aide to Senate Majority Leader Tom Daschle (D-SD), said the law will actually result in lower benefits for many retirees and will eliminate many of the options in coverage retirees now enjoy. She expressed concern not only on several of the law’s provisions but how it was debated and passed.
Leone suggested that many in Congress are also concerned about the law because some of its long-term costs are just now becoming known. Last November Daschle introduced two bills to revise the prescription drug bill S 1974 and S 1999. Provisions would address issues such as the re-importation of prescription drugs and allow the federal government to negotiate the prices of drug to get a discount for Medicare-covered retirees.
Smith is a professional staff member of the House Ways and Means Committee’s majority staff. She works with the Health Subcommittee, which has jurisdiction over Medicare. Leone is a key legislative aide for Sen. Tom Daschle. She focuses primarily on the issues of health care and Medicare.
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