Prescription Program Would Start in 1991, Pay Half of Costs : Conferees Tentatively OK Medicare Coverage for Drugs

WASHINGTON —  House and Senate conferees tentatively agreed Tuesday to include prescription drugs in the Medicare program starting in 1991, with the government paying half the cost after the first $600 a year, sources said Tuesday.

Under the agreement, the government’s share of the costs would rise to 60% in 1992 and 80% in 1993 and thereafter. But the deductible that must be paid by beneficiaries would also rise, with medical inflation, to an estimated $710 in 1993.

The conferees also agreed informally to make mammography, a vital test for early detection of breast cancer in women, eligible for Medicare coverage.

Would Pay $50 of Cost

For women 65 and older, Medicare would pay up to $50 toward the cost of a mammogram every other year. The benefit would start in 1990, and the $50 limit would be revised to keep pace with medical inflation.

Rep. Pete Stark (D-Oakland), chairman of the House Ways and Means subcommittee on health, called the mammography provision a “revolution. We will begin to pay for preventive medicine for the first time. With mammography, early detection of breast cancer saves lives and can reduce the need for thousands of dollars of hospital costs.”

The agreements on prescription drugs and mammography were reached in closed-door sessions of a House-Senate conference committee that is trying to reconcile differing House-passed and Senate-passed bills to protect Medicare recipients against catastrophic health care costs. A final version of the bill is expected ultimately to receive the support of the full House and Senate.

The conferees are trying to develop a Medicare expansion that is self-financing, with the 32 million beneficiaries paying through premiums.

Both versions of the bill--and presumably the final version as well--would provide Medicare coverage for unlimited days of hospital care, after patients pay for the first day. By contrast, the current Medicare system requires that the patient pay the full cost of the first day and a daily charge of $135 after the 60th day.

To pay for the new benefits, all Medicare participants would pay a flat premium of $4 or $5 a month. In addition, the 40% of participants who have enough income to pay federal income taxes--generally individuals with incomes of $13,000 or more and couples with $20,000 or more--would pay a surcharge on their income tax payments.

Size of Premium Weighed

The conference committee must still work out the size of the premium and the tax surcharge.

The prescription drug provision tentatively agreed upon by the conferees represented a compromise between the more generous House-passed provision and a less generous benefit voted by the Senate.

The House version of the legislation called for covering all prescription drugs beginning in 1990, and it included a $500 annual deductible to be paid by Medicare participants. The Senate, by contrast, had approved full coverage of prescription drugs only as of 1994, with a $600 annual deductible.

The compromise calls for starting the program in 1991, closer to the House than the Senate starting date. But its $600 deductible is part of the Senate package.

Of Medicare’s 32 million elderly and disabled beneficiaries, an estimated 5.6 million people a year would have high enough drug bills to qualify for the new benefit.

Not Officially Adopted

The compromise prescription drug provision was crafted by a conference task force of four senators and four House members. Their agreement has not been officially adopted by the full conference, but formal agreement is expected later this week.

But first, the conferees will have to agree on complex cost-control measures. Senate conferees insist that the legislation must have strong guarantees that rising costs not cause major increases in the premiums paid by Medicare participants. This could mean a grant of powers to federal regulators to restrict benefits if expenses rose faster than revenues.

“There has been a real battle over cost controls, with everybody worrying about what inflation might do to this new benefit,” said a congressional staff member who asked not to be identified.

In its final form, the compromise is likely to make “everybody a bit grumpy,” said a knowledgeable source. The “senior citizens, the pharmacists, the drug manufacturers won’t get everything they want, but they will see the others had to give up something.”