WASHINGTON--Sen. Bob Graham, D-Fla., and a coalition of colleagues introduced legislation Thursday to overhaul Medicare and add a long-awaited prescription drug benefit to the program.

The Medicare Reform Act of 2001 would provide all seniors with access to a prescription drug benefit, regardless of income. It also aims to bolster Medicare to prepare for the retirement of the baby-boomer generation.

``The medicare program is not functioning as well as it used to when it was younger,'' Graham said. ``We need to look at the program as a whole, both how it does business and how it serves our seniors.''

Graham was joined by Sens. Zell Miller, D-Ga., Thomas Carper, D-Del., Blanche Lincoln, D-Ark., Lincoln Chafee R-R.I., and Jay Rockefeller, D-W.Va., in announcing the act.

``This is something that is long overdue,'' said Miller. ``Not one of us can think of reforming Medicare without including a prescription drug benefit. Drugs have become just as important as hospitals and doctors.''

According to the proposed plan, retirees, after paying a $250 deductible, would pay 50 percent of the cost of prescriptions until they have spent $3,500 out-of-pocket. At that point, their payment will be reduced to 25 percent of the cost of prescriptions until they have spent an additional $500, totaling $4,000 in out-of-pocket spending.

Expenditures would be capped at $4,000 and Medicare would pick up all remaining expenses without any co-insurance costs to beneficiaries. Participation in the program would be voluntary.

According to the Congressional Budget Office the estimated monthly premium for this plan would be $52. This total would be on a sliding scale so that poorest of beneficiaries would not pay any of the monthly premium.

Graham said most retirees would receive a 50 percent premium subsidy. Beneficiaries with high-incomes would receive 25 percent.

The CBO has estimated the cost of the prescription benefit at $318 billion, but Graham expects the savings from Medicare reform components to bring that figure down to the $300 billion set-aside in the congressional budget.

``Our bill will help all seniors get their drugs quickly and affordably,'' said Miller. ``And now that the impartial budget office has deemed this plan affordable there is no excuse for putting it off any longer.''

``This is something like a patient's bill of rights for managed care,'' he said. ``Just as the American people are ready for us to protect them from HMOs, our seniors are ready for us to protect them from high drug costs.''

The reform act would also change the way Medicare does business with health care providers. The bill would try to improve the efficiency of Medicare by replacing complex government payment formulas with a competitive pricing system.

Instead of a complete restructuring of the national system, a ``Competitive Pricing Demonstration Project'' would be established in Florida.

``I would be happy to welcome a competitive bidding demonstration to be done in Florida if there's fear of having it elsewhere,'' said Graham. ``It has worked well for private firms and for state and local level agencies and it would equal a lot more savings compared to the pricing methods currently being used.''

The lessons learned from the Florida project would demonstrate what would and would not work with a competitive bidding system.

The reform package would also restructure Medicare by changing management practices, adding preventive benefits to Medicare, and creating an independent panel of medical experts to make coverage decisions.

Sen. Chafee is currently the only Republican who has voiced his support for Graham's bill. ``I expect the more moderate members of my party to vote for it,'' Chafee said. ``But it is an entitlement, so its a controversial issue.''

From Healthy.net