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House unveils plan for prescription drugs
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4-24-2000 Washington. House Republicans have agreed on a plan to provide prescription drug coverage to all 40 million Medicare recipients. Under the proposal, the government would subsidize private insurance companies willing to offer coverage to the elderly and disabled. Insurance companies, in turn, would have the pooling power to negotiate discounts with drug manufacturers. "Those Medicare beneficiaries who choose this voluntary plan would never have to pay retail prices for their prescription drugs again," said House Speaker J. Dennis Hastert, R-Ill., at a ceremony to unveil the proposal. The plan also would limit the amount of money Medicare recipients would have to pay for prescription drugs in a year, after which Medicare would pick up 100 percent of the tab. By contrast, a plan proposed by President Clinton calls for the government to directly subsidize premiums for all seniors who sign up for the benefit. The White House called the GOP proposal "a major disappointment." Both the Republican and Democratic plans are estimated to cost as much as $40 billion over five years. Patricia Smith, senior federal health lobbyist with AARP, formerly the American Association of Retired Persons, said she welcomes the plan while cautioning that many details still must be worked out. "A year ago, the discussion was only about a drug subsidy for low-income people," she said. "Today, both parties are talking about expanding the benefit to include all Medicare recipients. That’s a good sign." Smith added that half of all seniors spend less than $200 on prescription drugs annually, so it is unknown how many middle- and upper-income Medicare recipients would be willing to spend an estimated $60 per month for coverage they may not need.
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