Medicare drug benefit legislation will be moved through the Senate Finance Committee in time to have a full Senate vote before Congress breaks for the August recess, Finance Committee Chairman Grassley (R-Iowa) told AARP Feb. 14.

"It must be done before August," Grassley told AARP's legislative meeting in Washington, D.C. "Once we have taken our summer break during August, there's a whole new atmosphere in this town. It's much more political."

If President Bush "wants to get prescription drugs done, we'd better get it done by that August break or everybody's focused on the year 2002 elections."

Grassley claimed the budget will have "probably $400 bil., maybe $500 bil." over 10 years for prescription drugs and some other new benefits, such as long-term care.

At a same-day joint press conference with Finance Committee Ranking Member Baucus (D-Mont.), Grassley said the committee will hold hearings in March "to address the financing of Medicare, changes in long-term growth assumptions and budgetary impacts of a prescription drug benefit."

He added that the committee will also hold hearings on the uninsured and long-term care "early in the year," to be followed by "Medicare modernization and prescription drug hearings that will take us through May."

Grassley's hope for passage of a Medicare bill by August reflects a more ambitious timeline than envisioned by Sen. Majority Leader Lott (R-Conn.). Lott has suggested that the issue would not be looked at until the fall (¹ [A#00630050000]).

Finance Committee Health Policy Director Monica Tencate acknowledged that the committee could end up sending a bill to the Senate before the full body is ready to debate it. "It would be our hope to, at a minimum, get it through the committee before the August recess," she told the press conference. "It's hard to predict much more than that."

The House also appears to be contemplating longer term development of Medicare legislation.

House Ways & Means Committee Chairman Thomas (R-Calif.) suggested at the AARP meeting that it could be 2002 before the Medicare debate comes to a close, since there are other important legislative issues to be considered this year. "I think we can do taxes, social security reform, and move significantly in the direction of Medicare reform this year and certainly next year," he said.

Grassley reiterated his concerns with the President's interim state block-grant plan, noting that "my plans for the committee are in concert with the President's goals, not necessarily in concert with the President's specific proposal."

Baucus agrees with Grassley on the basic goals of a Medicare bill, the committee chairman indicated.

"We have agreed to move forward together and begin to craft legislation that we can move out of committee," Grassley said. "Foremost, our goal is to design a prescription drug benefit. It's got to be part of Medicare."

"We also have to be sure that our existing Medicare framework is capable of supporting a new drug benefit" and "plan to address Medicare's many inefficiencies," Grassley added. The Finance chairman also plans to push for an overhaul of the Health Care Financing Administration (² Also see "HHS Reorganization To Dismantle HCFA Recommended In Senate Testimony" - Pink Sheet, 19 February, 2001.).

During the joint press conference, Grassley and Baucus indicated that the "Breaux-Frist II" Medicare plan, which was reintroduced by Sens. Breaux (D-La.) and Frist (R-Tenn.) the following day as S 358, could serve as a model for developing committee legislation.

Both Breaux-Frist I and II, originally introduced during the 106th Congress as separate bills, offer prescription drug access to all beneficiaries. However, the first proposal includes comprehensive Medicare reform based on the Federal Employees Health Benefit Plan, while the second contains more incremental reform.

Grassley said "a good starting point is Breaux/Frist" for the committee's Medicare discussion, because it involves "incremental changes in Medicare as well as prescription drugs."

Baucus agreed that "Breaux-Frist II is probably a little more popular. There's more interest than [Breaux--Frist] I."

Finance staffer Tencate added that while Breaux-Frist II "is a starting point," some elements the committee would like to address in reforming Medicare "are missing completely" from the proposal, "like measures of solvency and looking [at] what we can do to modernize the fee-for-service program." Tencate, formerly a staffer for Frist, was involved in drafting the original Breaux-Frist plan.

Tencate indicated, however, that the premise outlined in Breaux-Frist of having private-sector competition to provide the prescription drug benefit while also allowing beneficiaries to choose a government-sponsored drug plan as a fallback option would be acceptable to Grassley.

"You have to be able to combine that market-oriented approach with some strong federal oversight and protection for seniors," she said.

Breaux expressed optimism that the changes in committee leadership will result in action being taken on Medicare. He said that with a new President, Senate Finance chairman and ranking member, and House Ways & Means chairman, Medicare "is something that Congress will address this year" because "you essentially have a whole new group of people that are in charge of the process."

Breaux said he would oppose attempts by Congress to add a drug benefit to Medicare without reforming the program. "I don't think that you can just add another program to Medicare without reforming Medicare."

"We are not going to be able to add prescription drugs and the hundreds of millions of dollars that it's going to cost and have us micromanaging in terms of prices," he continued. He said he does not want Congress to be "determining what drugs you're going to get and how much we're going to pay for them....We do not have the capacity...because we are not trained physicians, to determine what drugs are going to be covered."

"We will have every pharmaceutical company in the country coming in and saying, 'you've got to offer my drug and not their drug,'" Breaux maintained. "We can't manage what we have on the table now let alone trying to add a new prescription drug program without any changes in it. It will not work."

Baucus, however, said that "I will work for prescription drug benefits and some ways to help modernize Medicare, but if it looks like that's just not going to work, I would push for a prescription drug benefit alone."

Medicare Rx Bill: Senate Finance Chair Grassley Sets August Deadline

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