WASHINGTON, Nov. 17 (UPI) -- Following are some the key elements of the $400 billion Medicare prescription drug compromise legislation worked out over the weekend in a congressional conference committee. This bill is subject to final passage by the conference committee and also passage by the House and Senate before it can be signed into law by President Bush.
1. Seniors could buy prescription drug discount cards, for 2004 and 2005, that could save them up to 25 percent of their drug costs. Additional subsidies would be available for the low-income.
2. The actual drug benefit begins in 2006, with an average monthly premium of $35 and a $275 deductible. The government would pay 75 percent of drug costs up to $2,200. Seniors would then pay all drug costs until they reached $3,600, at which time catastrophic coverage would kick in and the government would pay 95 percent. Seniors up to 150 percent of poverty and assets of $6,000 or less would be exempt from the premium, deductible and the coverage gap but would have to pay small co-pays of $1 to $5 per prescription.
3. In 2010, up to a six-year demonstration project would be set up to have traditional, fee-for-service Medicare compete with private plans in select geographic areas where at least 25 percent of seniors are in private plans. Seniors would pay higher premiums if traditional Medicare costs more than the private plans are paid by the government.
4. Premiums for Part B Medicare -- which covers physician visits and other outpatient services, would be, for the first time, tied to income, and would increase annually. Seniors with incomes higher than $80,000 per year would pay higher premiums for their coverage.
5. Should general tax revenues pay for more than 45 percent of Medicare expenditures Congress would be required to consider ways to control Medicare spending -- reducing benefits or raising the Medicare payroll tax.
6. Prescription drug coverage would be provided through preferred provider organizations, HMOs or drug-only insurance plans. The government would provide a fallback plan in any geographic area in which fewer than two private plans were available.
7. Tax breaks would be provided to encourage seniors to invest in medical savings accounts that would be coupled with lower-cost, high-deductible plans offering limited or catastrophic benefits.
8. Dual eligibles -- those eligible for Medicare and Medicaid -- would have their drugs provided through Medicare.
9. Employers who provide retiree health benefits would get a 28 percent government subsidy for what they spend on retiree drug coverage. Some $70 billion is allocated for this.
10. About $12 billion is included for incentives to lure preferred provider organizations to participate in a new Medicare advantage program that would include the current Medicare+Choice HMO plans and private plans already participating in Medicare.
11. Seniors would be allowed to buy prescription drugs from Canada but only if the government says it is safe to do so -- something it has been reluctant to do.
12. The deal includes $25 billion for additional payments to healthcare providers in rural areas, as well as the cancellation of 4.5 percent in payment cuts to physicians.
