Medicare drug benefit breakthrough

WASHINGTON — Republican congressional leaders stepped to the brink of agreement Wednesday on major Medicare legislation to create a prescription drug benefit for older Americans and carve out a vast new role for private insurance companies in the government-run health care program.

"I think it’s a middle-of-the-road deal," said Sen. John Breaux of Louisiana, the first Democrat to swing behind the proposal after Republicans scaled back their demand for competition between traditional Medicare and the private plans.

GOP congressional officials said the administration was ready to embrace the agreement, and President Bush was scheduled to discuss Medicare at an appearance in Florida today. GOP leaders said they also expected the backing of the politically influential AARP, with 35 million members age 50 and over.

Apart from the drug benefit and new system of private health care, officials said the measure would include steps to ease the availability of lower-cost generic drugs. On another point, though, no change was expected in the ban on the importation of brand name prescription drugs from Canada and other countries where they often sell more cheaply than in the United States. Current law requires the Food and Drug Administration to certify the medicine’s safety before imports are allowed.

In a gesture to conservatives, the legislation would also create new health-related tax accounts for individuals purchasing high-deductible health insurance. It also would establish an unusual requirement for the president and Congress to review Medicare’s finances if the cost of the program grows more than expected.

Many details of the emerging agreement were sketchy, and subject to change as Republicans work to firm up support. But passage of the emerging bill would mark the most dramatic overhaul of Medicare since the program was created at the height of the Great Society in 1965.

Beginning next year, older Americans would be eligible to purchase a discount card that the administration estimates would yield savings of 15 percent or more off the cost of drugs.

The broader drug benefit would become effective in 2006, with people offered the chance to purchase coverage at a monthly cost of $35. Those with low incomes would receive subsidies for the premium, deductibles and co-payments involved, and the poorest would be required to pay as little as $2 per prescription.