Trying to counter President Clinton's call for Medicare to cover prescription drugs, the House is scheduled to vote this week on a tax-relief bill that would allow Medicare beneficiaries to deduct from their taxable incomes the cost of buying insurance policies that cover prescription drugs.
In approving the drug provisions in the Financial Freedom Act of 1999, members of the House Ways and Means Committee said last week they were trying to pressure the White House to negotiate with them to narrow the prescription drug coverage included in Clinton's Medicare reform package.
Committee officials described the provision as a "placeholder" for more-comprehensive Medicare reform.
"It probably has more of a symbolic nature to it than any significant dollar cost," said Rep. William Thomas (R-Calif.), chairman of the Ways and Means health subcommittee.
"We are in dire need of the president's specifics," he said. "We want to sit down, we want to write policy, and we want to make sure that seniors are not used as bait in another political election."
Thomas served as administrative chairman of the National Bipartisan Commission on the Future of Medicare, which drafted, but did not formally approve, a Medicare reform plan that proposed covering the prescription drug costs of beneficiaries whose incomes are 135% of the poverty level or less.
Last month, Clinton responded with a reform plan that would allow beneficiaries to pay a premium of $24 per month to join a new Medicare Part D, which would cover prescription drugs. Part D would pay half of beneficiaries' drug purchases, up to a limit of $1,000.
If the House tax-relief bill passes, it could be enacted only if:
* The federal government provided a subsidy for seniors who have incomes of 135% of the poverty level or less.
* The government required Medicare supplemental insurance policies to cover prescription drugs.
* Drug coverage for the nonpoor elderly was included in coverage by comprehensive private-sector Medicare health plans that compete with government-run fee-for-service Medicare.
Under the Clinton Medicare reform proposal, fee-for-service Medicare would be exempted from competing with the private plans (See story, p. 27).
Committee Democrats were quick to criticize the tax-deduction proposal.
"It's truly laughable," said a Democratic aide. "This is a burp in a hurricane."
Rep. Fortney "Pete" Stark (D-Calif.), senior Democrat on the health subcommittee, was defeated when he proposed a refundable tax credit that would have given seniors the same coverage as Clinton's plan.
Bruce Vladeck, a former HCFA administrator Clinton appointed to the Medicare commission, agreed with the Democrats.
He said it would benefit only beneficiaries with high drug expenditures who had enough cash to cover their prescription drug costs until they received a potential income-tax refund.