Conceding that the chances for a major restructuring of the Medicare program have dwindled significantly for this year, two senators last week unveiled a much slimmed-down reform package that is longer on expanded benefits than administrative improvement.
Sens. John Breaux (D-La.) and Bill Frist (R-Tenn.) introduced a bill that would leave the traditional Medicare fee-for-service system largely intact. An earlier proposal would have made the fee-for-service system compete with private healthcare plans trying to attract Medicare beneficiaries.
The new proposal would transform HCFA into an independent agency with an outside advisory board. The earlier proposal would have created a HCFA oversight board, which the U.S. Justice Department, in an advisory opinion, deemed unconstitutional (May 8, p. 12).
In introducing the revised bill, Breaux and Frist acknowledged that the push to add outpatient prescription drugs to the Medicare benefit package had taken center stage. They said they hoped the clamor for a drug benefit would give them a chance to make incremental changes to the Medicare program that could set the stage for future reforms.
"If we can't get the whole apple, we ought to at least use (the prescription drug debate) to get a bite of the apple," said Breaux spokeswoman Bette Phelan.
But the new plan was overshadowed by continued bickering between congressional Republicans and the White House over their differing Medicare prescription drug proposals.
A Congressional Budget Office analysis of President Clinton's plan estimated costs at $79 billion over five years and $160 billion over 10 years (See "Government at Work," p. 6). In its budget blueprint for federal fiscal 2002, Congress set aside only $40 billion for Medicare prescription drugs and reforms.
That estimate didn't include the cost of a "catastrophic" provision under which Medicare would cover all of beneficiaries' prescription drug costs above a certain threshold. For that, Clinton proposes setting aside $35 billion between 2006, when the provision would take effect, and 2010.
CBO Director Dan Crippen, testifying before the House Ways and Means health subcommittee, said the catastrophic provision could double the cost of Clinton's proposal.
In a show of solidarity, Clinton appeared last week with congressional Democrats, who were touting a drug plan of their own. Congressional Democrats estimated their catastrophic drug provision would cost $50 billion over 10 years.