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Medicare Negotiators Struggle, Show Concern About Premiums

By Robert Pear

The New York Times -- WASHINGTON

House and Senate negotiators, struggling to complete work on a giant Medicare bill, expressed concern on Monday about new data suggesting that premiums would vary widely, even within states.

Lawmakers have agreed on the basic structure of drug benefits to be offered to 40 million elderly and disabled people under Medicare. But they have been unable to agree on sweeping changes in the structure of Medicare, which would require the program to compete directly with private health plans.

House Republicans say such competition would save money and give beneficiaries more choices. But Democrats say the proposal would undermine traditional Medicare.

A provision of the bill passed by the House in June could eventually limit the federal contribution to both private plans and traditional Medicare, requiring beneficiaries to pay any costs that exceed the federal contribution. The limit, or cap, would be set locally, depending in part on the premiums charged by private plans in the area.

Premiums in traditional Medicare are now uniform -- $58.70 a month -- and the Congressional Budget Office estimates that they will rise to $112 by 2013.

Estimates from the Department of Health and Human Services, now circulating on Capitol Hill, show that monthly premiums for the elderly could differ widely under provisions of the House bill.

Asked if he was concerned about the expected variation, Sen. Max Baucus, D-Mont., said, “Very much so, absolutely.”

Baucus, one of two Democrats participating in talks on the Medicare bill, said: “There would be variations, huge variations, between parts of the country, and variation within regions. That’s a huge problem.”

Under the bill, price competition would begin in 2010. The estimates from the Department of Health and Human Services show that by 2013, elderly people would be paying $58 a month in parts of North Carolina and Oregon, $67 in Springfield, Mo., and $75 in Tucson. But monthly premiums would be about $155 in Baton Rouge, La., $158 in Las Vegas and $190 in Baltimore.

Within states, the premiums could range from $83 a month in upstate New York to $165 in New York City. In Florida, premiums could range from $105 a month in Orlando and Jacksonville, to $165 in Miami.

Sen. Charles E. Grassley, R-Iowa, the leader of the Senate delegation to the talks, said the variation in premiums was “one of the impediments to getting something done” to promote competition between traditional Medicare and private plans.

Congress has budgeted $400 billion over 10 years for the Medicare legislation, a top priority for President Bush and members of both parties.