Medicare Drug Bill Nears Final Approval

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The Senate cleared the way Monday for final congressional passage of landmark legislation to add a prescription drug benefit and a free-enterprise flavor to Medicare, repelling twin attacks by die-hard Democratic opponents. At the same time, the Senate dropped efforts to pass energy legislation this year.

"Today is a historic day and a momentous day," Senate Majority Leader Bill Frist, R-Tenn., said as lawmakers broke through years of gridlock on the Medicare bill, which would make the most sweeping changes that program since it was created in 1965.

Defiant in defeat, Sen. Edward M. Kennedy, D-Mass., said the legislation "starts the unraveling of the Medicare system," and he accused the Republicans of planning a follow-up attack on Social Security after the next election.

A final vote on the Medicare bill was set for Tuesday, and even opponents conceded the outcome was not in doubt.

On the energy bill, Frist concluded there was not enough time before the Senate was to begin its holiday recess to find a compromise that would be acceptable by the House and overcome a Democratic-led filibuster in the Senate.

Bush administration officials said the White House was ready to push for that legislation in January, confident that Republican leaders will be able to get the support needed to pass the bill in the Senate.

"Although Sen. Frist remains committed to the energy bill, it appears in the short time we have left before we recess for the holiday, we will not be able to take up the energy legislation again," a spokeswoman for the GOP leader said.

The Medicare legislation, at its heart, was designed as a compromise of sorts, new drug coverage for all Medicare beneficiaries long sought by Democrats, combined with a Republican-backed plan to give private insurance companies a vast new role in health care for the program's beneficiaries.

The scope of the bill goes far beyond that, though, including an additional $25 billion for rural hospitals and health care providers, a requirement for higher-income seniors to pay more for Medicare Part B coverage and billions of dollars to discourage corporations from eliminating existing coverage for their retirees once the new government program begins.

The bill would satisfy other goals of conservatives, including creation of tax-preferred health savings accounts, open to individuals who purchase high-deductible health insurance policies.

Most controversial of all, the legislation would create a limited program of direct competition between traditional Medicare and private plans, beginning in 2010. Conservatives argue that would help bring down the cost of Medicare over the long run, while critics say it would privatize the program and lead to rising premiums for seniors who remain under the government-designed benefit.

"Modernizing Medicare will make the system better and enable us to say to seniors we kept our promise," President Bush said after visitng Army troops in Colorado.

Over and over, supporters of the bill stressed that after years of gridlock, the opportunity to act was at hand.

"If we don't do this at this time, it may be years" before another opportunity comes along, said Sen. Charles Grassley, R-Iowa, an architect of the bill. "There will never be total agreement," added Sen. Max Baucus, D-Mont., Grassley's partner in bipartisanship for months on the issue.

Critics were unmoved.

Senate Democratic Leader Tom Daschle called the bill a "bailout for the HMOs and insurance companies," and Sen. Hillary Rodham Clinton, D-N.Y., said the well-being of seniors had been "trumped by the interests of those who have money to make and are taking advantage."

The bill's path to passage was cleared in the Senate on a pair of procedural votes, one entirely predictable, the other suspenseful to the end.

First, on a roll call of 70-29, 10 more than needed, the Senate voted to limit debate. A few hours later, Daschle failed in a final attempt to halt the bill's progress by invoking arcane budget rules. The vote was 61-39, one more than the 60 that supporters needed. For several minutes before the gavel fell, the tally stood frozen at 58-39, three votes not yet cast, neither side certain of victory.

Finally, Sen. Lindsey Graham, R-S.C., cast his lot with the GOP leadership. Then Sen. Trent Lott, R-Miss., did, too. Seeing that Republicans had provided the 60th vote needed, Sen. Ron Wyden. D-Ore., then gave the bill a 61st.

Lott, a former Senate majority leader who is expected to vote against the bill on final passage, brushed past reporters afterward without commenting. Another pivotal Republican, Sen. Lincoln Chafee, R-R.I., gave his vote to Frist and the GOP leadership after winning assurances that Providence wouldn't be picked for the program of direct competition, according to officials.

The House had passed the measure near dawn on Saturday on a vote of 220-215, and President Bush is eager to sign it. Final approval would give him and the congressional Republican majorities a significant legislative and political triumph on an issue that Democrats have long exploited in political campaigns.

The GOP-controlled House, with Hastert making the issue a priority, has approved Medicare drug legislation in earlier years. But the Senate deadlocked twice in the recent past, once with Republicans in control, the other time when Democrats held a majority.

Bush's decision to back legislation, coupled with Frist's ascendancy to the position of majority leader, changed the political equation in the Senate. Both houses approved measures in June, the Senate version gaining bipartisan support but the House bill clearing principally on the votes of conservative Republicans.

Under the legislation, the prescription drug benefit would begin in 2006. In the interim, seniors would be eligible to purchase a Medicare-backed discount drug card, at a cost estimated at $35 a year, that the administration estimates would mean savings of between 15 percent and 25 percent off retail prices. Critics argue those estimated savings are wildly inflated.

Lower-income seniors would receive an annual $600 government subsidy for use in conjunction with their cards.

Beginning in 2006, the legislation would allow seniors to purchase coverage for their prescription drugs. GOP officials estimate the premium cost would be $35 a month, with a $250 deductible. The coverage would pay 75 percent of costs after that until a senior's drug costs reached $2,250. After that, there would be a gap in coverage until out-of-pocket expenses reach $3,600, or roughly $5,100 in overall prescription expenses. Above that level, insurance would pick up roughly 95 percent of costs.

The measure includes subsidies for low-income seniors.