Senate Democrats unveil Medicare prescription drug plan

Under the legislation, pharmacy benefit managers or insurers would administer the Medicare prescription drug benefit.

By Gina Shaw, AMNews correspondent. July 23, 2001.

Washington -- As the Congressional debate over a patients' bill of rights hits a crescendo, Senate Democrats, looking to consolidate early gains from their takeover of the chamber, are setting their sights on the Medicare prescription drug issue.

In late June, Sen. Bob Graham (D, Fla.) and a bipartisan group of colleagues introduced the Medicare Reform Act, which includes a standardized outpatient prescription drug benefit that operates much like the PPO-style coverage offered in many workplace health plans.

All Medicare beneficiaries would be eligible to participate in the bill's voluntary drug coverage plan. Most beneficiaries would split the cost of their premiums with Medicare, but, based on a sliding scale, low-income seniors would get full premium coverage and those with "very high incomes" would pay higher premiums.

After paying a $250 deductible, participants in the plan would receive graduated drug coverage under a formula that supporters say is designed to "ramp up" to provide the most help to people with the greatest need. For each prescription above the deductible up to $3,500, Medicare would split the cost with beneficiaries; between $3,500 and $4,000 in out-of-pocket spending, Medicare would pay 75%. After $4,000 in out-of-pocket costs, a cap would kick in, and Medicare would pay the remainder of prescription drug expenses.

What really sets the Graham bill apart from other prescription drug coverage legislation -- including President Bush's plan and a proposal co-sponsored by Sens. John Breaux (D, La.) and William Frist, MD (R, Tenn.) -- is its administration. [...]