"How do you decide which bill is better if you're a normal human being?" asks Robert Hayes, president of the Medicare Rights Center in New York. "And both bills are woefully inadequate." In both bills, the drug benefit would begin in 2006 and would be optional. People who want to buy it would pay monthly premiums, a deductible and co-payments. The coverage would be delivered by private companies, competing for the new business within regions. Only the Senate bill requires the government to offer the benefit if private companies don't think it's worth their effort.
Both bills also impose higher costs for current Medicare benefits such as home visits and lab tests.
The matter grows more complicated when you look at the bills' differences. To simplify, what follows is a guide to the catch phrases and buzzwords such as "means test," "federal fallback" and "premium support." So take a deep breath and get ready to understand the Medicare debate and how proposals from Congress could help or hurt you.
Estimated monthly premium: Under both bills, the drug benefit would cost you about $35 a month, if you decide to sign up. That's an estimate for the first year only, and the premium could vary from plan to plan. It would be deducted from the beneficiary's Social Security check, or, in the House version, it could be paid by electronic transfer.
Deductible: This is the amount you pay in drug costs out of your pocket before the benefit starts helping you. It's $250 annually in the House bill, $275 annually in the Senate version.
Co-pays: The House bill requires you to pay 20 percent of drug costs after meeting your deductible. Once your drug costs hit $2,000, however, the "doughnut hole" of no coverage begins. (See next item.) The Senate bill requires you to pay half your drug costs, after your deductible. At $4,500, the "doughnut hole" begins.
Doughnut hole: This is the mid-level gap in coverage in both proposals during which you pay all your drug costs, until catastrophic coverage kicks in. (Don't expect it to make sense. It's how lawmakers expect to keep the drug benefit from ballooning over $400 billion in 10 years.)
Catastrophic coverage: That means a lot of help for patients with giant drug costs. The House bill's benefit pays all your drug costs after you've paid $3,500 a year out of your own pocket, although that limit on out-of-pocket spending rises if your income is $60,000 or more. The Senate bill's benefit pays 90 percent of your drug costs after you've paid $3,700 a year out of your pocket.
Effective date: In both bills, the drug benefit would start Jan. 1, 2006.
Dual-eligible beneficiaries: Some people are eligible for both Medicaid and Medicare. In the Senate bill, those eligible for Medicaid, a state and federal program that already covers drugs, would be ineligible for the Medicare drug benefit.
Employer-sponsored coverage: Many retirees get drug coverage through health plans offered by their former employers. Whether businesses would continue to offer these benefits after the Medicare drug benefit is available is in doubt.
Entitlement: The drug benefit is a new universal entitlement program. To oversimplify, conservatives don't like entitlements because they're expensive and represent "big government." Liberals think entitlements such as Medicare have worked pretty well to improve people's lives.
Fee for service: This is old familiar Medicare. Doctors or hospitals provide you a service, and Medicare pays them a fee. Under both bills, you could stay in traditional, fee-for-service Medicare and still buy the drug benefit. Or you could stay in traditional Medicare and skip the drug benefit. Or you could choose a Medicare-endorsed HMO (health maintenance organization) or PPO (preferred provider organization) plan through a private insurer that would include a drug benefit, doctor services and hospital stays.
Federal fallback: Both bills divide the country into regions. Under the Senate bill, if fewer than two private insurers step forward in a region, the federal government would offer the drug benefit. The Senate bill contains this "federal fallback." The House bill does not, and that could leave some regions of the country without a drug benefit, critics say.
Interim drug discount card: Both bills offer this discount card for prescription drugs until the new drug benefit starts in 2006. The discount cards would start in 2004.
Means test: Your income level -- your means -- could determine how much you'll pay out of your own pocket for drugs in the House version of the bill (higher-income people pay more). In addition, the House bill raises a privacy issue because it would give insurers access to IRS records so they can double-check your income. You can opt out, but if you do, they'll assume you're rich.
Part C: That's the name for the new integrated Medicare benefit plan that would include a drug benefit and hospital and doctor visit coverage, and be delivered through private companies. It's also called Medicare Advantage.
Part D: That's the name for the Medicare-endorsed drug benefit seniors could get from private HMOs, PPOs or stand-alone drug benefits companies.
Stand-alone drug coverage: An insurance policy covering prescription drugs only. Today most private insurance plans offer coverage for all health care costs, including prescription drugs. Virtually no private insurance companies are offering coverage for drugs alone, creating doubts about whether companies will be willing to offer such coverage.
Premium support: The House bill, beginning in 2010, would provide a voucher, or contribution, toward your monthly premiums in a private plan of your choice. Critics say traditional, fee-for-service Medicare would suffer under this system. Why? See the next item.
Preferential enrollment: Critics of the House bill say private insurers would offer cut-rate plans that would appeal to healthy seniors and leave sicker people in traditional Medicare, driving up its premiums and costs as the risk pool thins.
Privatization: Both bills, to some extent, allow private companies to deliver health benefits endorsed by Medicare. This is controversial. The Heritage Foundation thinks neither bill goes far enough to save Medicare by letting private insurers compete. Public Citizen thinks privatization would undermine a successful program by creating disparity between sick and well recipients.
State Health Insurance Assistance Programs: Every state has one that provides answers to questions people have about Medicare. The Senate bill beefs up the funding to this program. The House bill does not.
Vote: Your clout with Congress.
•Carla K. Johnson can be reached at (509) 459-5148, or by e-mail at carlaj@spokesman.com. Read her blog online. Look for the link from www.spokesmanreview.com.
