NU Online News Service, Nov. 24, 2003, 7:55 p.m. EST – The Senate today continued to debate a compromise version of H.R. 1, a Medicare prescription drug program and Health Savings Account bill backed by many insurers and insurance trade groups.[@@]

Sen. Edward Kennedy, D-Mass., had tried to prevent the Senate from voting on the bill. He began an effort Saturday to block a vote by organizing a filibuster, or an endless series of speeches by bill opponents.

Today, the Senate voted 70-29 today to invoke cloture. A vote for cloture is supposed to end debate on a bill within 30 hours of passage.

The Senate also voted 61-39 to beat back a motion introduced by Senate Minority Leader Tom Daschle, D-S.D., that would have put off a vote on H.R. 1 by declaring that the current version of the bill violates the Congressional Budget Act of 1974.

The House approved the “conference report” on H.R. 1, or the compromise version, Saturday by a 220-215 vote.

President Bush is supporting the bill, and press reports are calling the final vote on the bill, which is scheduled for Tuesday, a formality.

The drug program created by the bill would start out providing prescription discount cards for all Medicare beneficiaries. In 2006, the program would begin charging Medicare beneficiaries $35 per month for a plan that would pay none of an individual’s first $250 in annual eligible drug costs; 75% of the costs between $250 and $2,250; and 95% to 100% of the costs over $3,600.

The program would reduce or eliminate most out-of-pocket prescription costs for the poorest Medicare beneficiaries, according to a copy of a joint explanatory statement posted on the House Web site.

The HSA section of the bill would provide an “above the line” deduction for taxpayers with high-deductible health insurance. To start an HSA, a taxpayer would need individual health coverage with an annual deductible of at least $1,000 or family coverage with a deductible of at least $2,000.

A taxpayer could contribute up to 100% of the deductible amount, up to a limit of $2,600 for individuals and $5,150 for families, according to an analysis by lawyers at Davis & Harman L.L.P., Washington. Taxpayers between the ages of 55 and 65 could contribute more.

HSA holders could use the cash to pay for long term care insurance and temporary health insurance during periods of unemployment as well as the types of expenses eligible for reimbursement through Flexible Spending Accounts.

HSA holders who become disabled or reach age 65 could include HSA distributions in taxable income, then spend the distributions however they want.

Able-bodied HSA holders under age 65 who spend HSA money on nonqualified expenses would have to include the distributions in taxable income and pay an additional 10% tax, according to the explanatory statement.

The conference report version leaves out a provision in the House bill that would have let uninsured taxpayers and taxpayers with insurance deductibles as low as $500 open health accounts.

The House has posted links to the explanatory statement and other information about the conference report at http://waysandmeans.house.gov/Special.asp?section=43

Links to more information about the bill are available at http://thomas.loc.gov/cgi-bin/bdquery/z?d108:h.r.00001: