The Reagan administration and a team of Senate Finance Committee members have reached agreement in principle on a compromise "catastrophic" health insurance bill that will expand Medicare to cover the cost of outpatient prescription drugs, Senate and White House sources said yesterday.
The agreement clears the way for quick Senate passage and eliminates the threat of a presidential veto unless there is an unanticipated hitch or the bill is dramatically expanded in conference with the House. Sources said an agreement had been reached in principle but aides were working late into the evening to resolve details.
Sen. George J. Mitchell (D-Maine), one of the five Finance members who have been negotiating for weeks with Office of Management and Budget Deputy Director Joseph R. Wright, Health and Human Services Secretary Otis R. Bowen and other administration representatives, said the outline of an agreement has been reached on an outpatient drug benefit, which the administration had earlier opposed as too costly, and other issues.
An administration spokesman concurred, saying, "An agreement in principle has been reached, but they are going over all the details" before sealing a final agreement.
Senate Minority Leader Robert J. Dole (R-Kan.), who played a key role in facilitating the accord, told the Senate early yesterday, "I believe they have reached an agreement."
Sen. John Heinz (R-Pa.), author of the original drug amendment, said the bill will contain "a program and a literally life-saving drug benefit whose time has come. The key was getting the administration to recognize, as they have, that a chronically ill person with drug costs of $600 to $1,400 a year will be just as poor and catastrophically affected as someone with a one-year spell of illness and $3,000 in unpaid hospital bills."
Finance Committee Chairman Lloyd Bentsen (D-Tex.) sponsor of the catastrophic health insurance bill, said he is prepared to accept the compromise worked out by Sens. Mitchell, Heinz, Thomas A. Daschle (D-S.D.), John H. Chafee (R-R.I.) and David F. Durenberger (R-Minn.) if the president agreed to do the same.
The basic catastrophic bill approved earlier by the Finance Committee would have guaranteed 31 million Medicare beneficiaries unlimited free hospital care after paying an annual deductible of $540. It also guaranteed a Medicare patient need not pay more than $1,700 a year in such deductibles and copayments for Medicare-covered nondrug services.
These benefits would be financed by a new monthly premium for all beneficiaries of $4 a month plus an income-related premium for middle- and higher-income beneficiaries. It contained no outpatient drug benefit.
Under the compromise, the patient-paid deductible would be $1,850 instead of $1,700, which would rise each year to keep pace with increases in costs of the program.
In addition, the compromise would add an outpatient drug benefit. Medicare would pay 80 percent of the cost of outpatient drugs exceeding $600 a year, a cutoff that would also rise annually in pace with costs. In 1990, this benefit would cover only chemotherapy, immunosuppressive drugs and intravenous antibiotic drugs. But cardiovascular and diuretic drugs would be added in 1991, and all other outpatient prescription drugs in 1993.