C.B.O. House bill could make some seniors pay more

By ERICA WERNER, The Associated Press
3:20 p.m. August 28, 2009

WASHINGTON — Some seniors could end up paying 20 percent more for their Medicare prescription drug plans under health care legislation in the House.

But overall prescription drug spending would decrease for seniors on average under the bill, the Congressional Budget Office said Friday in a new report.

Seniors spending more on prescription drugs would be the ones to benefit under the legislation, while those who spend a relatively small amount on drugs would stand to take a hit, CBO said. The agency did not estimate how many seniors would fall into each category.

The CBO said prescription drug premiums would rise by 20 percent over the next decade in part because the Democratic-written House health care bill would increase costs by eliminating an existing gap in Medicare prescription drug coverage.

Since patients who would have fallen into the coverage gap would see more of their costs paid, overall drug spending by patients would decrease on average.

Currently, about a quarter of Medicare patients with prescription drug coverage fall into the so-called "doughnut hole" coverage gap, and they are the ones who would be most helped by the House bill.

The gap in coverage occurs once the cost of a patient's prescriptions exceeds about $2,700. Patients have to cover the next $4,350 on their own until Medicare coverage kicks in again. The House bill would close the gap gradually until it was eliminated in 2022.

Before then, beneficiaries would get a 50 percent discount on many brand-name drugs in the doughnut hole under the House bill.

Both sides in the debate over health overhaul legislation claimed the CBO analysis bolstered their position.

Republicans focused on the rise in premiums.

"This bill will force the vast majority of seniors to pay more to see their doctors and more to get their prescription drugs," said Rep. Dave Camp, R-Mich. "Health care reform should make health care more affordable, not more expensive. Clearly, it is time to scrap this bill and start over."

Democrats highlighted the CBO's conclusion that overall drug costs would decrease on average.

The Democrats' bill "will eliminate the 'doughnut hole' gap in drug coverage that has plagued seniors, dramatically improving the Part D (prescription drug) benefit and cutting seniors' drug costs," said Energy and Commerce Committee Chairman Henry Waxman, D-Calif.

The fate of the health overhaul bill will be settled once Congress returns from its summer recess after Labor Day.

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