Congress Moves Forward on Rx Discount Card

Published May 31, 2016

On July 30, members of the House-Senate conference committee charged with reconciling differences between the House (HR 1) and Senate (S 1) Medicare reform bills reported they were nearing agreement on a program for temporary prescription drug discount cards to seniors.

The discount drug card is meant to be an interim prescription drug plan for Medicare beneficiaries until a formal Medicare prescription benefit becomes effective in 2006.

Senate Finance Committee Chair Charles Grassley (R-Iowa) said aides for members of the conference committee had made headway on the drug discount card provisions, telling the Associated Press and other news services, “There’s no doubt that there will be a subsidy, there is no doubt that there will be a drug card, because you need an interim program.”

Both the House and Senate Medicare bills would provide a discount card that reduces prescription drug costs by 15 percent or more. Lower-income beneficiaries would also receive subsidized drug coverage through the cards.

Under the House bill, beneficiaries would be eligible for subsidies on a sliding scale; those whose incomes are below 135 percent of the federal poverty level would receive an $800 annual drug subsidy. Those whose incomes are above 150 percent of federal poverty level–$13,470 per year for an individual–would receive a $100 annual subsidy. Beneficiaries with incomes between 135 percent and 150 percent of poverty would receive a $500 drug subsidy.

The Senates bill differs in that beneficiaries with incomes of up to 135 percent of the federal poverty level–$12,123 per year for an individual–would be eligible for a $600 annual drug subsidy.

Congressional aides are saying although conferees have made progress on the provisions, nothing will be settled until committee members return from their August recess.

According to the New York Times, Bush said it is essential a final bill encourages employers to maintain the prescription benefits they currently provide for their retired employees. He said, “It’s important that those who have assumed the responsibility, the corporate responsibility, of providing prescription drugs for their retirees, keep providing that benefit.” Bush stopped short of saying just how that could be accomplished in law.

38th Anniversary of Medicare

Also on July 30, President George W. Bush held a White House ceremony celebrating the 38th anniversary of former President Lyndon Johnson’s signing of the Medicare law.

Obscure as Medicare’s anniversary usually has been, both political parties found it a useful opportunity for politicking, given the heated climate in which the Medicare bills are being negotiated.

Senate Minority Leader Tom Daschle (D-South Dakota) used the White House ceremony to accuse Republicans of attempting to reinvent Medicare and eliminate the program as it is known today.

According to Kevin Corcoran, executive vice president of the National Association of Health Underwriters (NAHU), reinventing Medicare is the right approach. Corcoran explained, “Comprehensive Medicare reform is crucial to the program’s long-term stability. Current Medicare benefits are simply not secure for the 77 million baby boomers set to retire in just eight years. The Medicare program is in desperate need of comprehensive reform to ensure that sufficient financing is available to provide high-quality health care to America’s seniors.”

“Lawmakers have still some heavy lifting to do,” said Bush, “before reaching a final compromise on reform legislation.” He added, “But, we expect to plow through the doubts and get a good bill. … My pen is ready.”

Conrad F. Meier is senior fellow in health policy at The Heartland Institute and managing editor of Health Care News. His email address is [email protected].

For further information contact Heartland Public Affairs Director Greg Lackner, 312/377-4000, 773/489-6447, email [email protected]