The Democratic Plan
The Democratic prescription drug plan would add a new Part D in Medicare that provides voluntary prescription drug coverage for all Medicare beneficiaries beginning in 2005. Because the plan would be part of the Medicare program, the benefits would be guaranteed. The basic benefit would have a $25 monthly premium, with a deductible of $100 per year. After the first $100 in expenditures, beneficiaries would be responsible for 20% of drug costs, with Medicare covering the remaining 80% of costs. All costs would be covered after a beneficiary spent $2,000 out-of-pocket.

The Republican Plan
The Republican bill does not guarantee any specific benefit. Instead, the Republican bill provides subsidies to insurance companies to provide private insurance to seniors. Individual insurers may design the coverage and set the premium. The assistance shown in the tables would only be available to beneficiaries who can find a private plan that offers the benefit described in the Republican bill. This benefit is described as follows: the benefit would have a $33 monthly premium, with a deductible of $250 per year. Beneficiaries would pay for all of the first $250 worth of drugs used, then pay 20% of the cost of between $251 and $1,000, and 50% of the costs of drugs from $1,001 to $2,000. After $2,000 worth of drugs are used by seniors, the plan would provide no further cost sharing until the beneficiary spent $3,700 out-of-pocket. All costs would be covered after a beneficiary spent $3,700 out-of-pocket. However, any amounts reimbursed by a third-party payer would not count towards meeting this catastrophic limit.

Information for Low-Income Seniors
Under the Democratic proposal, seniors with incomes below 150% of the poverty level will pay no premium. Seniors with incomes between 150% and 175% of the poverty level will receive a sliding scale premium subsidy. Both groups will pay nominal or no cost-sharing. Under the Republican proposal, seniors with assets of more than $4,000 will receive no additional assistance. Seniors with incomes below 150% of the poverty level and assets of less than $4,000 will pay no premium. Seniors with incomes between 150% and 175% of the poverty level and assets of less than $4,000 receive a sliding scale premium subsidy. In both cases seniors pay a flat fee of $2.00 or $5.00 per prescription. But once these seniors use over $2,000 worth of drugs the Republican plan offers no assistance in paying for the cost of drugs until they have spent $3,700 out-of pocket. This $3,700 must be paid by the individual, and any assistance from an employer-sponsored plan or other plan, or assistance from any charity, does not count toward the limit.