This document presents witnesses' testimonies and prepared statements from the Senate hearing called to examine coverage of prescription drugs and mental health services under the Medicare program and to consider the feasibility of various options for including coverage of these items and services under Medicare. The prescription drug coverage principles discussed include the nature and scope of the coverage; the use of deductibles, coinsurance, and other cost sharing; the administration of the benefit; reimbursement; quality assurance; cost and utilization control; and the financing of the benefit. Mental health service issues covered include the nature of any changes in coverage, changes in types of services that are subject to the current coverage limits, and the financing of any benefit expansion. Statements are included by Senators John Heinz and George Mitchell, and by Representatives Thomas Downey, William Coyne, and Sander Levin. Witnesses providing testimony include: (1) Robert Helms, United States Department of Health and Human Services; (2) Steven Sharfstein, former Deputy Medical Director, American Psychiatric Association; (3) Ann Utley, National Mental Health Association; (4) Malcolm Strickler, National Association of Private Psychiatric Hospitals; and (5) Alan Spielman, executive director of Government Programs Legislation, Blue Cross and Blue Shield Association. Other materials submitted for the record are included. (NB)