Medicare’s Long Rx History

Published February 1, 2004

They say the wheels of progress grind slowly. The history of getting a prescription drug benefit into Medicare seems to validate that truism: It took 36 years.

Benefit Initiative Starts

May 1967: Task force studies adding drug benefit to Medicare, but no legislation evolves.

August 1997: President Bill Clinton signs the 1997 Balanced Budget Act (PL 105-33), which among other things creates the Medicare+Choice program to encourage beneficiaries to join private managed care and other health plans offering prescription drug benefits.

January 1998: Senator John Breaux (D-Louisiana) and Representative Bill Thomas (R-California) co-chair the National Bipartisan Commission on the Future of Medicare. A majority of the panelists endorse the concept of “premium support” and more competition between Medicare and private companies. Fourteen months later the commissions disbands with no agreement and no suggestions for legislation.

February 2001: Breaux and Senator Bill Frist (R-Tennessee) introduce bills allowing private insurance companies to compete for Medicare enrollees by offering prescription drug coverage. Both measures die in committee.

March 2001: The Congressional Budget Office estimates adding a prescription drug benefit to the Medicare program might cost more than $1 trillion over the next decade.

April 2001: The Senate adopts, 51-50, an amendment by Senator Charles E. Grassley (R-Iowa) to a budget resolution (H Con Res 83). The amendment would reserve $300 billion over 10 years to fund a prescription drug benefit.

July 2001: President George W. Bush announces a plan for a privately administered prescription drug discount card. Two months later, a federal judge overturns the program because Congress did not authorize it.

June 28, 2002: The House passes a Medicare reform bill costing $350 billion over 10 years. The bill would allow beneficiaries to buy private insurance policies for drug coverage. The bill dies in the Senate without consideration.

July 2002: The Senate votes on four different prescription drug plans offered as amendments to legislation making it more difficult for drug companies to block approval of less-expensive generic drugs. All four plans fail to muster the 60 votes needed for passage.

Rx Benefit Arrives

January 28, 2003: In his State of the Union address, Bush announces his budget proposal would provide $400 billion over 10 years to modernize Medicare and create a prescription drug benefit.

June 27, 2003: The House passes its version of the drug benefit by a one-vote margin, 216-215. The Senate passes its version 76-21.

July 7, 2003: The Senate names conferees to a joint Senate-House committee that will hammer out differences between the two bills.

July 14, 2003: The House names its conferees.

November 15, 2003: Republican leaders and some of the conferees reach a conference agreement.

November 22, 2003: The House adopts the conference report, 220-215.

November 25, 2003: The Senate adopts the conference report, 54-44, clearing the bill for delivery to Bush.

December 8, 2003: Bush signs the Medicare Prescription Drug Improvement and Modernization Act of 2003. A temporary drug discount plan will launch in spring 2004. The more formal Medicare prescription drug plan is scheduled to begin in 2006.