March 17,2000

Committee to Look at Prescription Drug Coverage for Medicare Beneficiaries

WASHINGTON -- The Senate Finance Committee will meet on Wednesday, March 22 at 10:00 am in Dirksen 215 for the first of two hearings regarding the inclusion of a prescription drug benefit in the Medicare Program.

The following witnesses are expected to testify before the committee:

PANEL I:

Jennifer O'Sullivan, Specialist in Social Legislation, Congressional
Research Service, Washington, D.C.

William J. Scanlon, Ph.D., Director, Health Financing and Public
Health Issues, General Accounting Office, Washington, D.C.

Edwin C. Hustead, Consulting Actuary to the Congressional Research
Service, Washington, D.C.

PANEL II:

Alan F. Holmer, President, Pharmaceutical Research and Manufacturers
of America, Washington, D.C.

Charles N. Kahn III, President, Health Insurance Association of
America, Washington, D.C.

Alan B. Levin, Chairman, President, and Chief Executive Officer, Happy
Harry's, Inc.; Vice Chairman, National Association of Chain Drug Stores Board of
Directors, Newark, DE

Background:

Medicare Reform and the Possible Inclusion of a Prescription Drug Benefit:

On March 22 at 10:00 A.M. the Finance Committee will hold its third Medicare reform hearing of the year. The first hearing focused on the larger concepts incorporated in both the Breaux-Frist proposal and the Administration's proposal for fundamental Medicare reform. The second hearing focused on how competition between public and private health plans would be structured under the Breaux-Frist and the Administration's proposals.

This hearing will focus on the possible inclusion of a prescription drug benefit for Medicare. Both the Breaux-Frist premium support proposal and the Administration's competitive defined benefit proposal include a prescription drug benefit. In addition, a range of other proposals also have been developed, for example the Snowe-Wyden, Kennedy-Stark, and Bilirakis proposals.

Key questions remain to be answered. Should a drug benefit be targeted to those seniors at greatest risk -- those with lower incomes and those with very high drug costs - or should the benefit be provided to all beneficiaries, including those who already have coverage from an employer or elsewhere? Should the benefit be designed to help a large percentage of beneficiaries with routine drug costs or help the smaller percentage of beneficiaries who have thousands of dollars of drug costs during the year?

The first panel will consist of a series of witnesses from Congressional support agencies. Jennifer O'Sullivan, Specialist in Social Legislation at the Congressional Research Service, will discuss the current extent of drug coverage among Medicare beneficiaries. William J. Scanlon, Ph.D., Director, Health Financing and Public Health Issues at the General Accounting Office, will discuss how prescription drug benefits are managed by employers and insurers who currently provide coverage to workers and retirees over age 65. Edwin C. Hustead, Consulting Actuary to the Congressional Research Service, will discuss the various types of drug coverage and design considerations in developing a drug benefit for the Medicare population.

The second panel will consist of stakeholders in the discussion over prescription drug coverage. Deborah Briceland-Betts, Executive Director of Older Women's League will discuss some of the concerns and considerations important to Medicare beneficiaries.. Alan F. Holmer, President, Pharmaceutical Research and Manufacturers of America will offer the perspective of the pharmaceutical industry. Charles N. Kahn III, President of the Health Insurance Association of America will discuss the insurance industry's experience in providing drug coverage to the Medicare population and highlight some of that industry's concerns. Alan B. Levin of the National Association of Chain Drug Stores, will share the experience and perspective of the chain drug store industry.

This is the first in a series of two hearings.