* Capping growth. Last year, general tax revenues paid 30% of Medicare's costs; the rest came from a special Medicare payroll tax and seniors' modest premiums for some of their coverage. But House Republicans, with backing from the Bush administration, had been pressing to require Congress to hold a new vote on increasing Medicare taxes or reducing benefits if those general revenues reach 45% of Medicare's costs. Instead, they got watered-down language requiring the president to propose such legislation and Congress to consider it.

* Limiting coverage. Medicare historically has required seniors to make modest out-of-pocket payments for benefits covered by the plan. But the drug plan would require a $420-a-year premium and a $275 deductible. Then it would pay only 75% of prescription costs up to $2,200. No coverage is provided for out-of-pocket drug costs between $2,200 and $3,600 per year. After $3,600, 95% of drug costs would be covered. The complicated plan is designed to protect individuals with staggering drug costs while giving seniors a financial incentive to keep their drug costs low.

* Tying premium costs to income. Since Medicare's creation in 1965, all seniors, whether middle class or millionaires, have had the same deductibles, co-payments and monthly premiums for optional coverage. The tentative agreement would impose a sliding scale for premiums based on seniors' earnings. Those with incomes exceeding $80,000 a year would pay more.