Democrats propose overhaul of Medicare prescription drug benefit

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Congressional Democrats have suggested a plan to alter the prescription drug benefit so beneficiaries do not have to pay for drugs during coverage gaps.

The proposal, which they introduced Tuesday, would allow the Centers for Medicare & Medicaid Services to negotiate drug prices with pharmaceutical companies. The measure also allows beneficiaries to choose a drug plan administered by the federal government rather than by a private insurer.

Money saved through negotiated drug prices would be used to eliminate the drug benefit's so-called "doughnut hole," proposal supporters say. This term refers to the gap in coverage under which beneficiaries pay for 100% of drug costs between $2,250 and $5,100. CMS Administrator Mark McClellan said he doubts that the government could negotiate better prices than drug plans.