Proponents are confident that the sweeping changes will be approved.

WASHINGTON – For the first time in nearly four decades, Congress is poised to approve a historic expansion of the Medicare program, providing prescription drug coverage for 40 million senior citizens and the disabled.

The Senate defeated two procedural votes designed to block the legislation Monday, proving that Republican sponsors have the numbers to send the bill to President Bush’s desk. The House passed the $395 billion measure in a nail-biting three-hour 220-215 vote just before dawn on Saturday. The Senate is expected to cast its final vote on passage Tuesday morning.

“Today is a momentous day and a historic day,” said Senate Majority Leader Bill Frist, R-Tenn., the chamber’s only doctor, as he held up a medicine bottle to demonstrate Congress’s decision to give drug coverage to seniors.

The bill creates a discount drug card beginning in 2004, followed by a comprehensive drug benefit beginning in 2006, but it effectively prohibits the purchase of cheaper drugs abroad. The legislation also creates a pilot program to let private insurers compete against Medicare in six cities, and it allows individuals to establish tax-reduced savings accounts to pay for medical expenses.

The final vote will provide Bush with a major domestic victory and bragging rights on the campaign trail. Although he largely stayed out of the GOP congressional negotiations that produced the bill, Bush heavily lobbied reluctant Republicans to support the House-Senate compromise.

Unlike the partisan House vote, many Democrats in the Senate agreed to support the bill Monday, despite opposition by Senate Minority Leader Tom Daschle, D-S.D., Sen. Edward M. Kennedy, D-Mass., and the Senate’s three presidential candidates who returned from the campaign trail to vote against the bill.

“There’s a reason why so many seniors are calling my office urging me to vote against this bill,” said Sen. Dick Durbin, D-Ill. “The prescription drug benefit is very complicated and there’s no effort in this bill to reduce drug costs for seniors or anyone else. Their biggest concern and mine is (that) it’s going to force seniors out of Medicare and into HMOs. I think that will be disastrous for seniors and Medicare.”

Similar to those in the House, conservative Republicans in the Senate expressed discomfort with committing to the huge, perpetual annual expenditures the bill will create.

“We’re doing a terrible thing to our children and grandchildren,” said Sen. John McCain, R-Ariz., who plans to vote against the bill along with Sens. Trent Lott, R-Miss., and Don Nickles, R-Okla.

The controversial legislation was crafted primarily by Republicans, with just two Democrats participating in the House-Senate negotiations – Sens. Max Baucus of Montana and John Breaux of Louisiana.

Democrats, led by Kennedy, charged that the landmark legislation would do more for HMOs and the pharmaceutical companies than it would for seniors. They complained that Medicare would be prohibited from negotiating with companies to lower the cost of drugs. And they said the use of private insurance companies would undermine traditional Medicare, leading to its ultimate demise.

“The Senate is on trial,” thundered Kennedy, who voted to create the Medicare program 38 years ago. “Let us not reverse the historic decision our country made in 1965. Let us not turn our back on our senior citizens so that insurance companies and pharmaceutical companies can earn even higher profits.”

But Republican leaders argued that the bill would rein in the spiraling cost of Medicare while helping to sustain the program and add prescription drug coverage.

“We’re going to modernize Medicare. We’re going to bring it up to date,” Frist said.

Senators voted 70-29 to cut off Kennedy’s filibuster of the bill. When Democrats tried to kill the bill by raising a budgetary objection, the Senate – needing 60 votes to continue – voted 61-39 to waive all objections.

For the first time in its history, Medicare would be expanded to cover prescription drugs at an estimated cost of $395 billion over 10 years.

The plan, which was endorsed by the AARP, would provide a prescription drug card beginning in April or May of 2004 with discounts of 15 percent or greater, with low-income seniors receiving an additional $600 annual subsidy.

Beginning in 2006, senior citizens would be able to enroll in a prescription drug plan or join a private health insurance plan that offered drug coverage. Premiums would cost roughly $35 per month and there would be a $250 deductible. After that, insurance would cover 75 percent of drug costs up to $2,250.

The prescription benefit would provide no coverage after the first $2,250 in drug costs and would not resume until a senior citizen had spent $3,600 out of pocket. The insurance would cover 95 percent of drug costs above that level.

For low-income seniors earning less than $12,123 a year, the premium, deductible and gap in coverage would be waived. Those subsidies would be phased out for people earning up to $13,500 a year.

Also for the first time, the legislation would require seniors with annual incomes of more than $80,000 to pay higher premiums under Medicare Part B, which covers services outside the hospital. The size of those premiums would increase to as much as 80 percent for people with incomes above $200,000.

The bill would establish new tax-preferred health accounts, open to individuals with high-deductible insurance policies. The so-called Health Savings Accounts are a favorite of conservative Republicans, and one of the key selling points in the package.

In an effort to obtain a winning margin, Republican leaders included $25 billion for rural health care to boost Medicare payments to doctors and hospitals, particularly in the Midwest and West. Congress initially planned to cut reimbursements to doctors, but instead approved a 1.5 percent increase in payments.

Many conservatives in the House had hoped to pit traditional Medicare against private insurance companies in an effort to force competition and rein in costs. That plan was anathema to Democrats and to AARP, the leading senior citizens’ advocacy group. Republican leaders opted instead for the six-city pilot program to win AARP’s backing.

Sen. Olympia Snowe, R-Maine, a pivotal vote on health care issues, also agreed to support the bill after the so-called premium support competition program was scaled back.

“The House’s approach would have fostered wild fluctuations in premiums for the traditional Medicare program even within states or congressional districts – whereas Medicare now provides all seniors the same benefit for the same premium,” Snowe said. “While this bill isn’t everything it could be or should be, we should not forsake those who right now desperately need assistance.”

The legislation also includes tax-free subsidies worth nearly $70 billion as an incentive for employers who continue to provide prescription drug coverage for their retired employees.

The bill essentially would prevent Americans from buying drugs in Canada by requiring the Department of Health and Human Services to first certify that it is safe to do so. The department’s head, Tommy Thompson, has said he would not do that.

(c) 2003, Chicago Tribune.

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Distributed by Knight Ridder/Tribune Information Services.

AP-NY-11-24-03 2259EST

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