It seems as volatile as the stock market. After rapid passage of bills in the Senate and House in June, hopes that differences would be quickly reconciled have given way to concerns about the tough issues that still need to be resolved. Clearly, the commitment of $400 billion for prescription drug coverage would be a major step forward for the Medicare program, especially as the budget deficit has grown and this represents a substantial share of new federal spending. Even if a bill emerges from conference, however, it will include a number of contentious issues that will affect whether legislation is enacted this year. Three issues have dominated the discussion: the amount of new resources that will be devoted to a drug benefit, the details of the benefit, and the degree to which legislation would shift Medicare toward privatization. This period of uncertainty offers an opportunity to consider how these issues would affect Medicare beneficiaries.