Lawmakers Won't Make Drug Bill Deadline

By DAVID ESPO
The Associated Press
Tuesday, October 14, 2003; 11:33 PM

WASHINGTON - Key lawmakers working on Medicare prescription drug legislation conceded Tuesday they will miss an Oct. 17 target date for agreement, but reported progress on a plan to discourage companies from abandoning coverage they now provide retirees.

Sen. Charles Grassley, R-Iowa, said a core group of negotiators was likely to agree to spend $75 billion to $80 billion over a decade to help companies to maintain existing retiree benefits. Much of that would go to large companies.

In addition, he said there was discussion during the day's closed-door session of adding a tax credit to the legislation for companies that pre-fund health benefits for retirees, as they do pension benefits. "It's kind of an insurance policy," he said of the proposal.

Grassley, chairman of the Senate Finance Committee, spoke after a session of House and Senate lawmakers trying to agree on a Medicare bill that can pass Congress before the end of the year. The meeting occurred in the Capitol at roughly the same time President Bush was meeting with senior GOP lawmakers at the White House, where officials said he urged them to press ahead on Medicare while he is visiting Asia.

"I think there's a good chance we'll pass a bill this year," Sen. Max Baucus, D-Mont., told reporters, after the negotiating session, although he, like other lawmakers and aides, said flatly the Oct. 17 target date would pass without an agreement.

GOP congressional leaders set that goal several weeks ago, when the negotiations plagued by policy, political and personality differences appeared to be making little headway. Since then, lawmakers have begun making tentative decisions on a variety of issues, and have daily bargaining sessions scheduled this week on a variety of controversial items.

Wednesday's session, for example, is to be devoted to the discussion of whether to require upper-income seniors to pay more for their Medicare health coverage than other beneficiaries. Neither bill includes such a provision, but the Senate signaled its support last summer, and the House is on record in favor of requiring higher-income seniors with high drug use to pay more than others.

The issue of employer-provided drug benefits, which in some cases is more generous that what Medicare is likely to offer, is one of the most vexing for lawmakers.

The Congressional Budget Office has estimated that passage of a comprehensive Medicare drug bill could prompt employers to drop coverage for as many as 4.4 million retirees for whom they provide it.

Other estimates are far lower. But members of Congress fear a political backlash if the numbers turn out to be sizable, and for a variety of reasons, are willing to pay heavily to subsidize companies that now offer benefits.

"We feel there's a need to, and we will put a great deal of money into the program because it's cheaper to spend some money in (that) than have it 100 percent dumped on the federal government," Grassley, the chairman of the Senate Finance Committee, told reporters.

But Baucus said a limited amount of money is available. "It's the age-old problem. How much are we going to pay," he said. "...You can get results only on the margins."

Apart from adding a drug benefit, the legislation is expected to remake the Medicare system by introducing a new managed care option that gives private insurance companies a large new role. Republicans, in particular, favor the change, arguing it will modernize the system and increase control of costs.