The proposal, which is believed to have strong support in both houses, was greeted with reticence by the Bush administration.

The bill would allow those Medicare beneficiaries to enroll for 2007 drug coverage without paying $2.51-per-month lifetime penalty fees. After congressional Republicans and the White House ignored Democratic calls to extend the May 15 enrollment deadline, lawmakers from both parties said the compromise legislation was a good fit.

"When it comes to representing the interests of our seniors, and you know how many we have in Florida, I'll take anything I can get," said Sen. Bill Nelson, D-Fla., the bill's co-sponsor.

Another of the bill's co-sponsors, Sen. Charles Grassley, R-Iowa, said: "The more participants we have, the better for both the strength of the program and, more importantly, the seniors' quality of life."

Greeted with Reticence by Bush Administration

The proposal would cost $1.7 billion over five years and would be funded by Medicare dollars earmarked for special payments to Medicare managed-care plans.

Other co-sponsors of the bill, including Sens. Max Baucus, D-Mont., and Mike DeWine, R-Ohio, were optimistic that the proposal could be voted on before the current legislative session ends later this month. Lawmakers are working with Rep. Nancy Johnson, R-Conn., on similar legislation to be introduced in the House of Representatives.

The proposal, which is believed to have strong support in both houses, was greeted with reticence by the Bush administration. Health and Human Services Secretary Michael Leavitt said lawmakers should wait for final enrollment tallies before passing such a measure.

"I think there would be value in waiting to see whether or not it's needed," Leavitt said Tuesday. "We don't have a lot of the facts yet."

Medicare administrator Mark McClellan was concerned that the bill's cost could squeeze payments to Medicare managed-care plans. "It doesn't seem like a good time to tighten down further on payments to those plans that are saving more and more seniors a lot of money," McClellan said.

More Than 38 Million People Covered

Medicare officials said Tuesday that a surge of more than 1 million enrollments since May 9 helped push the number of people getting some form of Medicare drug coverage to more than 38 million people. About 872,000 new applications have been processed since May 7, said McClellan.

Monday was the high-water mark as nearly 144,000 people enrolled online and Medicare operators handled more than 640,000 calls. Both figures are records.

McClellan and Leavitt said only 4.5 million of eligible beneficiaries haven't signed up for the benefit. Of those, about 3 million are low-income beneficiaries who are eligible for special coverage that pays more than 95 percent of their prescription-drug costs with minimal or no premiums, low deductibles and no gaps in coverage.

So far, 1.7 million -- about 24 percent of eligible people -- have been approved for the subsidized low-income coverage. Many of the estimated 4 million who applied were determined to be ineligible because their personal assets exceeded the program's limits.

Myriad of Problems

All in all, Medicare officials were pleased with the enrollment activity, which, they said, easily bested similar first-year sign-up rates for other needs-based government programs. "This is a remarkable American moment," Leavitt said.

He praised volunteers, community groups, neighbors and relatives who helped steer beneficiaries through a complex, confusing array of program offerings to their coverage of choice.

Despite a myriad of problems that dogged the program after its launch in January, millions of people are saving hundreds and even thousands of dollars off their prescription drug costs with the plan. Officials will take what they've learned from the initial enrollment drive and try to improve the offerings next year.

"We're going to get better at this every year," Leavitt said.