SENATE APPROVES McCAIN's CATASTROPHIC REVISION PLAN RETAINING HOME I.V., IMMUNOSUPPRESSIVE DRUG COVERAGE IN 99-0 VOTE; FULL PROGRAM REPEAL VOTED DOWN

Executive Summary

The Senate on Oct. 6 resoundingly approved a catastrophic care reduction plan by Sen. McCain (R-Ariz.) to retain Medicare coverage for home I.V. and immunosuppressive treatments while repealing coverage for all other drugs. Diverging from the full repeal voted two days earlier by the House, the Senate opted for a severely scaled-back version of the program rather than an outright repeal. The House approved a repeal of the entire program by a 300-vote margin on Oct. 4 (see related story, p. 15). The issue of retaining coverage for home I.V. and immunosuppressive drugs, which had been only the first phase of the outpatient drug reimbursement program in the 1988 act, will next be debated in a House/Senate conference to reconcile the disparate catastrophic care amendments. In addition to repealing the full outpatient prescription drug benefit, the McCain amendment also deletes the cap on out-of-pocket spending for physician services while retaining a modified version of the skilled nursing facility benefit. The three benefits -- drug coverage, the Part B cap and nursing care -- were considered the most expensive pieces in the catastrophic care package. The Senate firmly voted down a proposal 73-26 by Sens. Roth (R-Del.) and Danforth (R-Mo.) to repeal the catastrophic care program. With its decision to stop short of repeal, the Senate avoids the appearance of an expedient flip-flop from enthusiastic support in 1988 to vigorous opposition this year. Senate Minority Leader Dole (R-Kan.) commented after the McCain vote that, unlike the House, "we've recognized there are limits on how far you can go on this particular issue. I'm not always in support of Sen. McCain, but he persisted . . . he achieved the result that I thought we would all reach at the close of this session." Sen. Rockefeller (D-W.Va.), who is head of the Pepper Commission on long term care issues, urged during the debate that at least some of the catastrophic benefits be maintained while Congress begins work once again on a more comprehensive health care program. "We can give them nothing, or something they can hold on to," Rockefeller said. "The Pepper Commission will come up with solutions," but in the meantime a repeal would be "a mistake of enormous and tragic dimensions." Some proponents of repeal have argued that a complete rollback is necessary so that groups like the Pepper Commission can design a new comprehensive health care program on a clean slate. Other catastrophic care proponents argued that the anti-catastrophic care constitutents are the wealthiest senior citizens and that repealing the act would harm the low income elderly. "If we repeal this bill, people will die and/or go bankrupt," Sen. Bradley (D-N.J.) said. Sen. Simpson (R-Wyo.) said a repeal will show that Congress has been "swung around by our tails by the wealthiest 5%" of the senior citizen population. Unlike the House, the Senate did not specifically debate the impact that scaling back the program would have on the federal budget. Under an amendment by Rep. Panetta (D-Calif.), the House agreed that its decision to repeal the program be accountable to the budget. According to McCain's staff, the expectation for the catastrophic plan in the Senate is that the tax revenues lost by the repeal of the supplemental premium will be added to the government's next long-term debt extension, which should be addressed in Congress in the next couple of weeks. The catastrophic care modification proposal sponsored by Sen. Durenberger (R-Minn.) and supported by Senate leadership was defeated early in the Oct. 6 debate by a 37-62 vote. The plan was considered by catastrophic care proponents as the strongest challenger to both McCain's bill and the repeal effort. The Durenberger proposal would also have repealed the full outpatient prescription drug benefit but retained coverage for home I.V. drugs and immunosuppressives. However, the plan retained more benefits than the McCain measure, keeping the "core" catastrophic care benefits, such as extended hospital coverage and the out-of-pocket cap on physician spending. The plan reduced the maximum supplemental premium from the current $ 800 to $ 200 in 1989 and the tax rate from 15% to 10%. Durenberger's measure was supported by Senate Majority Leader Mitchell (D-Maine), Minority Leader Dole (R-Kan.) and Finance Committee Chairman Bentsen (D-Tex.). McCain had argued that the Durenberger proposal would not be acceptable to critics of the program because it did not entirely eliminate the supplemental premium. "The surtax is the object of the anger and the ire of the senior citizens of America," the Arizona Republican said during floor debate. Durenberger called the defeat of his measure "the death knell for the catastrophic part of the catastrophic care program." He called McCain's bill "half a repealer" and said it is the "weakest of the catastrophic bills." Both Durenberger and Bentsen expressed irritation that the White House did not take a stronger position in the catastrophic care debate. "Where is the leadership of the Administration? Where are they standing up for the elderly citizens of the United States?" Bentsen asked. Durenberger suggested that White House support would have assured a victory for his proposal. "I think it's fair to say that we could have had catastrophic if the President of the United States had wanted a catastrophic bill," Durenberger told reporters. He added that the "lack of interest in the White House makes it much more difficult." While the Administration's line throughout the congressional debate has been in opposition to repeal or "tinkering" with the law, HHS Secretary Sullivan did express support for the Durenberger plan at a National Press Club luncheon on Oct. 5. However, Office of Management and Budget Director Darman quickly qualified that support in an Oct. 5 letter to McCain that the Administration "is not taking an official position in favor of any one of the competing" proposals. The Senate defeated a number of catastrophic care modification proposals before concluding its debate on the future of the program. Only one of the proposals, by Sen. Kennedy (D-Mass.), would have specifically retained the full outpatient drug benefit. Other senators who had previously emerged as champions of the drug benefit, Sens. Pryor (D-Ark.) and Heinz (D-Pa.), did not offer proposals on the floor to retain drug coverage. Kennedy's proposal would have preserved both the prescription drug and hospital benefits and eliminated the surtax. The modification would have been funded by raising the current Medicare Part B premium to cover the costs. The plan was defeated on a vote of 35-64.