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Quarter of medicare beneficiaries expected to pay little for drugs

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WASHINGTON -- Roughly one-fourth of Medicare beneficiaries, about 11 million elderly and disabled people, are expected to receive substantial assistance in purchasing their medicines when the new prescription drug benefit takes effect in 2006, Bush administration officials said Monday.

On the day when Democrats opened their national convention, Medicare officials announced proposed regulations to implement the prescription drug law signed by President Bush last December. Among the provisions, the regulations spell out how a controversial asset test would be administered to determine eligibility for more assistance.

The assistance will range from Medicare payments of about 85 percent to 97 percent of prescription drug costs depending on income.

Beneficiaries with incomes at or below the poverty level -- currently $12,568 for an individual and $16,891 for a couple -- would not have any premium or deductible and would pay about $1 to $3 per prescription.

About 1.5 million low-income beneficiaries with assets up to $10,000 for an individual or $20,000 for a couple could qualify for subsidies of about 85 percent of their prescription costs. Democrats had questioned what assets would be counted in determining eligibility.

Medicare's top official, Dr. Mark McClellan, said at a news conference that the proposed regulations would cover "liquid assets" such as bank accounts, investments and real estate holdings not counting "homesteads." He said assets would not include personal cars, jewelry or other "family heirlooms." McClellan also said the proposed regulations would "slow the rate of decline" in the number of employers providing drug coverage to their retirees. But he backed away from claiming that the rules would increase the number of retirees being covered by their former employers.

Previous reports by experts both in and outside the government had indicated that 2.7 million to 4 million retirees could lose their employer-sponsored coverage because of the new law.

Under the proposed rules, employers would be encouraged to continue providing some coverage. The rules would offer options that would provide employers with various subsidy levels depending on the extent to which they cover their retirees' drug benefits.

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Larry Lipman's e-mail address is ( Editor Notes:ENDIT

c.2004 Cox News Service

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