Congress passed a $1.95 trillion federal budget blueprint for fiscal 2002 that would set aside $300 billion over the next 10 years for Medicare reform and a Medicare prescription-drug benefit.
The Senate approved the blueprint by a 53-47 vote on May 10, one day after the House passed the measure by a 221-207 vote.
It isn't clear whether all of the $300 billion would come from the general federal budget surplus or be supplemented by the Medicare Hospital Insurance Trust Fund. However, the blueprint states that legislation implementing reforms shouldn't reduce the trust fund surplus.
The hospital industry fears Congress ultimately will pass a prescription-drug benefit that's so costly the government will have to cut Medicare payments to hospitals.
In addition to helping fund prescription drug coverage, the plan includes $28 billion for extending healthcare coverage for the uninsured.
"Like all budget resolutions, there's a great deal of flexibility for Congress," said Herb Kuhn, vice president of advocacy for the Premier hospital alliance. "But it's clear that there are two directions for healthcare: The first is assistance for the uninsured and the second is the Medicare drug benefit."
The blueprint, a compromise between separate House and Senate plans, sets spending and taxation targets for Congress and doesn't require President Bush's signature. Subsequent legislation to determine exactly how the money will be spent will require passage by both houses in addition to the president's signature. Actual spending may differ from the targets.
The $300 billion planned for Medicare reform and prescription-drug coverage reflects the Senate-passed blueprint and is
$140 billion more than Bush suggested and the House approved.
Resolving a last-minute snarl in budget talks, the blueprint also earmarks $28 billion over three years to pay for healthcare coverage for uninsured people. Sen. Phil Gramm (R-Texas) had pushed for the money to be spent over 10 years. The money could be spent on expanding government programs or returned to workers in the form of tax credits for buying health insurance if they don't receive coverage from their employers.