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Graham crafts a new drug plan

Sen. Bob Graham, who failed to persuade Senate Republicans to embrace his generous Medicare prescription drug plan, has drafted a much less expensive proposal he hopes will serve as a compromise.

Graham was not the only Florida Democrat proposing a compromise, however.

Rep. Jim Davis, D-Tampa, was one of several "new Democrats" in the House who unveiled similar legislation, estimated to cost about $400-billion over 10 years. That bill is mostly an expression of support for the Graham-sponsored compromise, since the House has already passed a Republican plan supported by President Bush.

Co-written by Sen. Gordon Smith, R-Ore., Graham's plan would provide comprehensive coverage for seniors with incomes up to 150 percent of the poverty level and "catastrophic" coverage for all seniors once their out-of-pocket spending reaches $4,000.

"This new bipartisan plan will help all seniors buy prescription drugs, but it will give the greatest help to the most vulnerable older Americans: those with the lowest incomes and those with the most serious health problems," he said. "It is affordable and reliable, and we think it is a proposal that a majority of senators can rally around."

The nation's largest lobbying group for the elderly backs the plan.

"We're going to support it," said William Novelli, executive director and chief executive officer for AARP. "We think this is the best we can get for our members. It's a framework to go back and work on."

Democrats are trying to take the lead on a Medicare drug compromise in part because they think it will help them win back control of the House and expand their majority in the Senate in the November election. Florida Democrats are out in front because they think it might also help the Democratic nominee for governor of Florida.

But to forge a compromise, the Democrats have given up much of what they set out to accomplish. It provides only a modest discount for anyone but the lowest income recipients until they reach the $4,000 level in annual expenditures on drugs each year. Some members of Congress are afraid that a proposal that does not provide generous benefits for middle class seniors might suffer the fate of the catastrophic health care bill that was repealed during the 1990s because of angry response from seniors.

Republicans, meanwhile, seemed stunned by the Democratic movement toward a smaller program that could be supported by more lawmakers. Most had no immediate comment. Rep. Michael Bilirakis, R-Tarpon Springs, who chairs the House Energy and Commerce Health subcommittee, did not respond to a request for an interview.

Unlike the Democratic plan, the House-passed GOP measure would put the administration of the program in the hands of insurance companies. It is estimated to cost about $370-billion over 10 years.

Under the GOP plan, costs for low income people would be heavily subsidized while others would pay a monthly premium of roughly $33 and an annual deductible of about $250. The government would pay 80 percent of the next $1,000 of drug costs and 50 percent of the subsequent $1,000.

All beneficiaries, including low-income seniors, would have to pick up the tab beyond that, until they reached $3,700 in out-of-pocket expenses, at which time all additional costs would be covered. The Republican measure also provides billions of dollars in increased Medicare payments to hospitals, doctors and nursing homes.

Graham's new plan, which would take effect on Jan. 1, 2005, would be available to all Medicare recipients who pay an annual $25 enrollment fee. There would be no monthly premium. Seniors whose spending on drugs reached $4,000 would receive 100 percent catastrophic coverage with a small copayment.

People with incomes up to 150 percent of the poverty level would receive comprehensive coverage from the first dollar spent on drugs. All others would get a discount of 20 to 35 percent, including a 5 percent federal subsidy.

On the Senate floor, meanwhile, members spent Friday debating a medical malpractice amendment supported by the president. Scheduled for a vote Tuesday, it would limit punitive damages to twice compensatory damages and curtail lawyers' fees.

_ Information from the Associated Press was used in this report.

One more time

Highlights of the Medicare prescription drug plan being worked out by Sens. Bob Graham and Gordon Smith:

Costs $400-billion to $450-billion over 10 years.

Covers about half of the 40-million senior citizens on Medicare.

Seniors with incomes below 150 percent of the poverty level would get full coverage with nominal copayments.

For others, the government would pay 5 percent of the cost of each prescription drug.

Once a senior reached $4,000 in drug costs, he or she would pay a $10 copayment on each prescription and the government would pick up the remaining cost.

All but low-income beneficiaries would pay a $25 annual enrollment fee but there would be no monthly premiums or deductibles.