With week two of his presidency underway, President Bush delivered on a campaign promise to work on Medicare and the prescription drug issue by sending Congress proposed legislation entitled Extending an Immediate Helping Hand. This bill would create block grants to states to help low-income seniors purchase prescription drugs. The block grants would total about $48 billion over four years, according to preliminary estimates.

As part one of Bush’s Medicare reform proposal, the plan is designed to be a temporary, but expedient, way to tackle the issue of Medicare prescription drug coverage while Congress and the Administration work on more comprehensive Medicare reforms, including prescription drug coverage.

Under the proposal, the full cost of drug coverage would be covered for seniors with incomes up to $11,600 who are not eligible for Medicaid or retiree benefits and for married couples with incomes up to $15,700, with no premium but “nominal” co-pays.

Single seniors with incomes up to $15,000 and couples with incomes up to $20,300 would receive a subsidy for at least half of the premium for coverage. Those Medicare beneficiaries whose out-of-pocket drug spending exceeded $6,000 would also be fully covered.

Part two of President Bush’s plan for Medicare reform calls for the appointment of a Medicare task force that would develop a permanent Medicare prescription drug solution and send it to Congress by Sept. 1 with a vote by the end of the year.

NACo supports prescription drug coverage for Medicare beneficiaries and actively lobbied the last Congress on the issue. Such coverage could help Medicare beneficiaries stay healthier, therefore potentially reducing emergency room and health care clinic costs and improving overall quality of life.

About half of all states already have prescription assistance plans for seniors in place, and proposals are pending in many others. According to the Bush proposal, those states that already have drug subsidy programs could use the federal money for other health-related purposes or to extend drug coverage to higher income levels.

Proposal receives mixed reviews
The Extending an Immediate Helping Hand legislation was received with muted enthusiasm on Capitol Hill. While congressional leaders welcome the president’s proposal and attention to the issue, they immediately indicated that they would expand upon the proposal to include broader Medicare reforms. Also, there appears to be little interest in waiting for the work of another task force. With one task force having already tackled the issue — the Bipartisan Commission on the Future of Medicare, which disbanded in 1999 without making a formal recommendation — most key lawmakers believe that appointing a task force could slow up the process and weaken momentum for Medicare reform.

In a meeting with President Bush about the Medicare proposal, Sen. Charles Grassley (R-Ind.), chairman of the Senate Finance Committee, which has jurisdiction over Medicare, voiced concern about a task force. But, he also stated that it could possibly help to tweak the earlier work of the Bipartisan Medicare Commission, specifically the Breaux-Frist proposal for Medicare reform. This proposal would make Medicare more like the Federal Employee Health Benefits Program. It would create a pool of private health plan choices and traditional fee-for-service Medicare from which seniors could choose, thereby making the health plans more competitive.

Grassley also expressed the need for Congress to act before the August recess. Sen. John Breaux (D-La.), an advocate for broad Medicare reform and the co-author of the Breaux-Frist plan along with Sen. Bill Frist (R-Tenn.), also voiced concern over timing, indicating that the Helping Hand proposal could take just as long to get through the Congress as broader Medicare reform.

Clearly, the ball is in the Congress’ court on this issue. The consensus among congressional leaders is that a Medicare reform package, including a prescription drug benefit, should be put together as soon as possible — within the next four months.

The president appears to be heeding congressional concerns and has indicated that he is not wedded to the task force idea and is willing to let Congress work out the best approach on the issue.

As we gaze into the legislative crystal ball, it seems apparent that if a bill is not passed this year, chances for action on this politically volatile issue will decrease dramatically.