Despite threats of a possible presidential veto, the Democratic-controlled House Ways and Means health subcommittee voted yesterday to add an outpatient prescription drug benefit to the catastrophic-illness insurance bill for the nation's 31 million Medicare beneficiaries.
Rep. Willis D. Gradison Jr. (R-Ohio) said all Republicans voted against it as Democrats pushed the provision through the subcommittee, headed by Fortney H. (Pete) Stark (D-Calif.), on a straight party-line vote, 7 to 4.
In a letter to House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.), Secretary of Health and Human Services Otis R. Bowen warned Congress that he would recommend a veto of the bill if Congress keeps adding new benefits such as the drug provision.
"Should this legislation reach the president's desk in its current form, other senior advisers and I would be forced to recommend a veto," said Bowen, who, ironically, first proposed adding catastrophic-illness insurance to Medicare.
The original Bowen bill proposed unlimited hospital care after an initial $520 deductible and a guarantee that no beneficiary need pay more than $2,000 a year out of pocket for Medicare-covered expenses.
The Stark measure, in provisions already approved by the full Ways and Mean Committee, would lower that threshold to $1,700, and also would include mental health, nursing, hospice, home health and other benefits.
Under the drug provision added yesterday, the Medicare program would pay outpatient prescription drug costs exceeding $800 a year for each beneficiary. The recipient would have to pay 20 percent of the cost above $800. The proposal, estimated by the Congressional Budget Office to cost about $835 million in 1990, the first full year, would be financed by a flat premium of about $1.80 a month initially for all beneficiaries and a small increase in the separate income-related supplemental premium that already was in the bill to help finance the other catastrophic-illness benefits.
The House health subcommittee has already recommended its own more generous outpatient drug benefit, sponsored by Rep. Henry A. Waxman (D-Calif.), paying costs exceeding $400 annually.
At a meeting of the full Energy and Commerce yesterday on the Waxman provision, Rep. Edward R. Madigan (R-Ill.) and administration spokesmen said HHS estimated the cost of the Waxman provision in the first year at $8.9 billion (or $22 a month in added premiums to each beneficiary) -- a figure much higher than the $1.1 billion ($3.60 monthly premium) that CBO estimated for Waxman's drug benefit.