"Key Senate Republican Offers Drug Benefit Plan."

By Donna Smith

WASHINGTON (Reuters) - In an effort to break a political logjam over a Medicare prescription drug benefit plan, the chairman of the Senate Finance Committee offered a proposal he said should win Democratic and Republican backing.

"What we are seeking here is to develop a program that would have broad bipartisan support,'' Chairman William Roth, a Delaware Republican, said ahead of a closed-door session with Finance Committee members to outline his new proposal.

The plan would create a new expanded option for Medicare beneficiaries that would provide a prescription drug benefit and expanded hospitalization benefits. Medicare recipients would be able to choose between current plan coverage or the expanded plan.

President Clinton and Senate Democrats welcomed the move. The White House has said Clinton would veto a Republican-drafted prescription drug plan passed by the House in June. That proposal would provide government subsidies to encourage private insurers to offer drug plans.

"I am pleased that there is growing momentum on Capitol Hill to provide a real Medicare prescription drug benefit, not a flawed insurance model,'' Clinton said in a statement from Camp David, Maryland, where he was hosting Middle East peace talks.

"I urge the Congress to work together in a bipartisan fashion to meet the challenges this program faces and to ensure that it continues to provide the critically important insurance coverage for the 39 million seniors and people with disabilities the program serves,'' Clinton said.

The ranking Democrat on the Finance Committee, Sen. Daniel Patrick Moynihan of New York, praised Roth's offer to strike a compromise deal.

"This is a positive event and a welcome event in a season where there aren't a great many,'' Moynihan said.

But the proposal was laid out as a broad outline and congressional aides said many details had to be worked out once the Congressional Budget Office (CBO) provided information on its cost and how much beneficiaries would have to pay in premiums and co-payments.

Sen. John Breaux, a Louisiana Democrat who helped author a bipartisan Medicare reform plan that includes a market-oriented prescription drug benefit, said the Roth plan would likely have a $500 deductible and a 50 percent co-payment.

"If you have a plan that says we are only going to give you some help after you reach a $500 deductible and then after that you still have to have a 50 percent co-payment, I'm afraid that a lot of people are simply not going to think that's a good deal and not going to pay a premium for it,'' Breaux said in a telephone interview.

Only people with high drug costs would pay for the new benefit and that would make it costly and unworkable, he said.

Pressure is mounting on Congress to enact a prescription drug benefit, particularly as Vice President Al Gore presses the issue in his presidential campaign against Republican rival George W. Bush.

But the cost of the new benefit is likely to weigh heavily on the Republican-controlled Congress.

"I compliment Senator Roth for his proposal which I want to review more thoroughly. I want to make sure that whatever Congress passes is fiscally responsible,'' Senate Assistant Majority Leader Don Nickles of Oklahoma said in a statement.

Roth's plan would adhere to the $40 billion over five years that congressional Republicans allocated to a Medicare drug plan in their budget proposal. That amount is significantly less than most of the Democratic alternatives.

Clinton has offered to accept a Republican proposal to offer a $250 billion tax cut to married couples over 10 years in exchange for their accepting a drug benefit plan of equal size. Republicans have been reluctant to negotiate a deal with the president. 

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