WASHINGTON (AP) – Legislation providing prescription drug coverage under Medicare won strong bipartisan approval Thursday in the Senate Finance Committee as part of the most far-reaching changes in the government’s health care program for the elderly since its creation in 1965.

“Both parties have promised for years to add prescription drugs to Medicare,” said Sen. Charles Grassley, R-Iowa, as he presided over a daylong debate carried out in front of dozens of health care lobbyists. “Today we’re here to deliver.”

“We’re about to pass landmark legislation,” added Sen. Max Baucus of Montana, the senior Democrat on the committee and Grassley’s partner in crafting the bipartisan bill.

The measure offers prescription drug benefits for the nation’s 40 million Medicare beneficiaries, with coverage to be offered through private insurance companies and financed in part through government subsidies. At the same time it provides for a new managed care option – preferred provider organizations – a step the Bush administration says would help modernize Medicare and shore up its long-term finances.

New version

The committee met as House GOP leaders rolled out their own version of the legislation. Both bills carried price tags in the range of $400 billion over 10 years, and both would impose higher costs on those who remain in traditional Medicare, in part by raising deductible charges for doctor care and out-of-hospital services.

Under both bills, Medicare beneficiaries would receive equal drug coverage regardless of what type of health care they receive. That was a rejection of Bush’s call to provide a more generous subsidies under PPOs as part of an effort to steer older Americans into managed care. The committee vote was 16-5 and set the stage for a debate in the full Senate beginning Monday.

Party leaders vote

In a striking sign that years of political gridlock over Medicare have been shattered, the Senate’s two party leaders – Sen. Bill Frist, R-Tenn., and Sen. Tom Daschle, D-S.D., both voted for the measure. Frist did so enthusiastically but Daschle less so, saying he hoped it could be made better. “I think it’s a start, however shaky we may view that start to be,” said the South Dakotan, who last week sharply criticized an earlier version of the bill.

Frist told reporters he was determined to pass the bill before lawmakers leave for a July 4 recess in two weeks and added he hoped to have a final compromise on President Bush’s desk by the first week of August.

Despite criticism from some Democrats, committee approval was never in doubt. An attempt by Daschle to put a limit on premiums for drug coverage was rejected, 14-7, and a proposal by Sen. Don Nickles, R-Okla., to remove a provision allowing states to give health coverage for legal immigrant children and pregnant women also fell, 13-8.

Bush campaigned for the second day for Congress to send him the legislation by July 4, a more ambitious timetable than the one Frist laid out.

“There’s story after story after story, all across America, about people wondering whether or not they can afford lifesaving drugs in their later years,” Bush said at New Britain General Hospital in Connecticut. “And the Congress must act, that’s what the Congress must do.”

By whatever timetable, the effort to approve legislation has taken on considerable momentum in recent days.

“This is the single biggest expansion of Medicare in its history,” Frist told reporters. And Bush’s plan for a bigger role for private insurance companies marked a major turn, as well, in a program conceived at the height of Lyndon Johnson’s Great Society more than three decades ago.

The House and Senate bills vary considerably in details, but at their core they are similar. Both cover a portion of drug benefits and the proposed PPOs, which would offer preventive care as well as a cap on out-of-pocket health care costs.

Both would give private companies a stronger role in the government-run program, although the House proposal goes further.

, with proposals certain to stir controversy.

In addition to raising the deductible on so-called Medicare Part B, both bills would impose higher patient fees for some tests done in labs housed in doctors’ offices or hospitals.

The House bill envisions $18 billion over five years in government savings by holding down the growth in payments to hospitals.

It also requires well-off Medicare recipients with higher drug costs to pay more in out of pocket expenses than others. “People who make $120,000 as a couple in retirement should at least be expected to pay a couple more dollars out of their pocket … so the program can work for all,” said Rep. Bill Thomas, R-Calif., the chairman of the House Ways and Means Committee.

Additionally, the House bill would inject a larger, more controversial dose of free-market competition. Beginning in 2010, it would require the national government-run health plan to compete for business with private insurance companies.

Even critics of the bill took note of the occasion as the Senate Finance Committee began its work. “This is a historic moment,” said Senate Democratic leader Tom Daschle, who has faulted the bill for leaving gaps in coverage and is expected to lead Democrats in pressing for changes on the Senate floor.

At the same time, he urged the bill’s supporters against being “too hyperbolic” in the claims they made for the bill.

Sen. Jay Rockefeller, D-W. Va., who has emerged as the bill’s most vocal opponent on the committee, said it was a “major deception” to delay the beginning of the prescription drug benefit until 2006. He suggested it was an attempt to delay until after the 2004 election, and suggested the benefit should become available a year earlier.

AP-ES-06-12-03 2159EDT

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