Medicare: Explaining the Details
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GWEN IFILL: Congress is back in session after the holiday break. At the top of its agenda: A Medicare prescription drug plan. As lawmakers sweat the final details, seniors are trying to decipher what it all means for them. Keeping track is Susan Dentzer of our health unit, which is a partnership with the Henry J. Kaiser Family Foundation.
SUSAN DENTZER: Retired furniture salesman Harry Forbes has high blood pressure and diabetes, and suffered a stroke in 1999. He lost so much mobility that he often uses a motorized scooter to get around. Like many of his fellow residents here at Heatherwood, an assisted living center in northern Virginia, the 78-year-old Forbes takes several costly medications.
HARRY FORBES: Oh, I would say somewhere around, let’s see, maybe $1,200 to $1,500 a year, somewhere in that vicinity.
SPOKESPERSON: And here he is, the man of the hour, Congressman Tom Davis.
Welcome, please come on in.
SUSAN DENTZER: That’s a key reason why Forbes and fellow residents of Heatherwood gathered last week to hear their congressman, Republican Tom Davis.
Davis was among a majority of House Republicans and a handful of Democrats who last month voted to include outpatient prescription drug coverage in Medicare. Davis told his audience that a congressional conference committee is now trying to merge that measure with a far different Medicare bill passed by the Senate.
REP. TOM DAVIS: So we don’t know what the final bill will look like, but I’m here today just to talk a little bit about what we did in the House to get input from you, and hear your comments on this as we move forward.
SUSAN DENTZER: Davis wasn’t the only lawmaker meeting with elderly constituents over Congress’ 4th of July recess.
SPOKESMAN: I now introduce to you Congressman Ben Cardin.
SUSAN DENTZER: The same day as Davis’ session, Democratic Representative Ben Cardin of Maryland met with seniors to explain why he voted against the House bill. He told his audience at the Bykota seniors’ center in Towson that he hoped Congress would now produce a more comprehensive drug coverage plan.
REP. BEN CARDIN: We’ve got to get it done. That means, people, we’re going to have to compromise. We understand that. It’s not going to be everything that I want or you want. We’re all going to have to sit down and try to work out a way that we can move forward on the issue.
SUSAN DENTZER: In sessions that were partly educational and partly salesmanship, these two lawmakers offered competing views of the House and Senate bills. The seniors listened in appreciation, but they were clearly having trouble absorbing all the details.
REP. BEN CARDIN: Yes.
SUE SIMON: If you pay the have… like a retiree, okay, and you don’t want to pay the — you’re afraid — your retiree plan has not been dropped — can you join both? I mean, in other words, can you join the Medicare so you don’t pay the penalty but don’t drop your private, unless they drop you. So you can have both.
REP. BEN CARDIN: Yes.
SUSAN DENTZER: Davis opened the Virginia session by explaining that under the House bill, the new prescription drug benefits would be available only through private health insurance plans. That’s different from the Senate bill. It would also create a fallback drug benefit available through the traditional Medicare program if not enough private plans offer drug coverage in a given region. Davis told his audience that the private plans the House bill envisions would be able to experiment. They could offer somewhat different benefit packages, at varying prices, to offer enrollees a choice.
REP. TOM DAVIS: This is modeled a little bit after the Federal Employee Health Benefit Plan, FEHBP. How many of you are part of the FEHBP? You know you get a lot of choices in that plan. That is the goal here, to give you a number of different options — maybe a high option, a low option — for prescription drug plans. So that would be available the way it’s envisioned this point — details to be worked out later, but that’s the theory.
SUSAN DENTZER: The theory seemed to sit well with Davis’ audience. Many were retired federal workers comfortable with the government’s health insurance program, which allows them to choose coverage from an array of private plans. Among them were Joe Weis, a 90- year-old retired electronics engineer for the Defense Department, and his wife, Kay, who’s 88. Like other retired federal workers on Medicare, they’ve had generous prescription drug coverage for years, through the federal employees’ plan.
KAY WEIS: We’re covered by the federal; we are federal. And I am assuming and from what I read, and from also what Mr. Davis said– that will not change.
JOE WEIS: I got pretty much the same feeling that what they are working on is, they’re trying to keep what we have and give us an opportunity to switch to something better, if there is.
SUSAN DENTZER: At the Cardin session, by contrast, the notion of having drug benefits available only through private health insurance plans came under intense criticism. That’s partly because of Maryland residents’ earlier experience with Health Maintenance Organizations that participated in a program called Medicare Plus Choice. Cardin explained.
REP. BEN CARDIN: Now we in Maryland, have an experience with private insurance companies. In 1996, before Congress enacted the Medicare Plus Choice Law, we had about eight HMO’s that were writing business for seniors covering 100,000 seniors in Maryland, with a managed care HMO product to cover their basic Medicare. Each of those companies have now left the senior market, abandoning our seniors. Why do we think they’re going come back and write a prescription drug plan for our seniors?
SUSAN DENTZER: Some in Cardin’s audience expressed particular concern about another provision of the House bill. Beginning in 2010, it would require the traditional Medicare program to compete head to head with private health plans.
CHARLES CULBERTSON: Is this a method of getting rid of Medicare? Can you tell me how that works?
REP. BEN CARDIN: Now, Charlie’s asking a good question. How do you do that? We do think it is consistent with the stated objective of the architects of the House bill, and that is to do away with Medicare as we know it today, and to require seniors ultimately to choose between private health care plans without having a government plan as a backup.
SUSAN DENTZER: Beyond the pros and cons of private health plans, the specific prescription drug benefits that would be available to Medicare enrollees also got different treatment at the two sessions.
REP. TOM DAVIS: Right now, median drug spending, if it’s $1,285 a year, there’s a $250 deductible, and then after that, it’s an 80/20 formula. At the top, if you’re paying $3,500 out of pocket, after that you get unlimited protection.
SUSAN DENTZER: But Davis did not mention that the Medicare drug benefits would be less generous than in most private health plans, including those available to federal workers. He also avoided the most controversial aspect of the benefits structure: A coverage gap often referred to as “the hole in the donut.” Cardin brought that up.
REP. BEN CARDIN: That 80 percent of your prescription drugs will be covered between $250 and $2,000. Then the next $2,900, from $2,000 to $4,900, there’s no coverage. Now, I want you to think about this for a moment. Here you are paying $35 a month in premium, perhaps more, and you have no chance of getting any benefits for the next five or six months because you’re in the “donut,” you’re in that section where you can’t get any benefits for your prescription medicines. You’re not going to be very happy about that, nor should you be very happy about that.
SUSAN DENTZER: In still another contrast between the two sessions, the lawmakers had different responses to questions about how swiftly seniors would see relief from high drug costs; 82-two year-old Terri Coleman asked Cardin why full drug coverage under the House and Senate bills would only come about in 2006.
TERRI COLEMAN: Why is the effective date so far in the future?
REP. BEN CARDIN: Why is the effective date so far in the future?
TERRI COLEMAN: I need… I need something now– yesterday!
REP. BEN CARDIN: The main reason why it’s been pushed out so long is price, cost to the government. They can… and they can advertise they’re doing more when they’re not doing as much.
SUSAN DENTZER: But at the Virginia session Davis reassured one questioner that changes would begin next year.
REP. TOM DAVIS: We’re going to have this take effect right away — the whole idea is to pass this and have this take effect over the next few months. So stay with us.
SUSAN DENTZER: As of 2004, in fact, seniors would have access to one new form of assistance. Prescription drug discount cards endorsed by Medicare would give seniors an estimated 20 percent break on retail drug prices. For his part, Harry Forbes said Davis’ presentation made him hopeful change was at hand. But he acknowledged that for him, and most of his peers, the details were still confusing.
HARRY FORBES: We don’t have as much information as we might like to have, and maybe some of us don’t understand quite as much as we should. But we’re all interested, and that’s the reason you had such a great turnout here for Tom today.
SUSAN DENTZER: The congressional conference committee is now at work on reconciling the many differences between the House and Senate bills, including the matter of private health plans. It aims to complete its work by the end of this month.