Bush unveils reform plan for Medicare

$198 billion proposal puts $6,000 ceiling on patient's costs

Candidate's No. 2 priority

Insurers would need to offer drug benefit

counters Democrats

Election 2000

September 06, 2000|By Paul West | Paul West,SUN NATIONAL STAFF

SCRANTON, Pa. - In an effort to counter the Democratic advantage on a key health care issue, George W. Bush unveiled a $198 billion Medicare reform package yesterday that includes a new prescription drug benefit for seniors.

Bush's 10-year plan, a response to criticism that his health care reform ideas lack substance, would create a new $6,000 annual limit on out-of-pocket medical expenses for all Americans over age 65.

Prescription drugs for seniors have zoomed near the top of the public's agenda, with polls showing that more voters trust Democrats to handle the issue. The focus on Medicare also reflects both the fact that seniors vote more heavily than other age groups and the lack of a drug benefit under traditional Medicare, which has become a financial burden for many seniors.

FOR THE RECORD - An article on Page 1A yesterday about George W. Bush's Medicare plan misspelled the last name of Bruce C. Vladeck, a health policy professor at Mount Sinai School of Medicine in New York and a former administrator of the Health Care Financing Administration.
The Sun regrets the error.

Speaking at a senior living center in Allentown, Pa., Bush said he would make his prescription drug plan the second measure he introduces in Congress - after education reform - if he's elected president.

"Keeping the promise of Medicare, and expanding it to include prescription drug coverage, will be a priority of my administration," said the Texas governor, whose plan would rely heavily on private insurance companies.

Bush's proposal includes a $48 billion prescription drug plan for lower-income seniors as a stopgap measure while more long-range Medicare reforms are put into effect under a $110 billion modernization effort.

Under the plan , all insurance companies providing Medicare coverage would be required to include a prescription drug plan and the elderly could use a subsidy paid by Medicare to buy the plan. A new federal agency would regulate the insurers' options.

In addition to the $158 billion in the basic reform package, Bush announced that he would set aside $40.3 billion in his budget over the next 10 years to restore Medicare cuts made under the 1997 balanced budget act. That additional spending would push Bush's total Medicare package to $198 billion over 10 years.

Vice President Al Gore's campaign and some health care experts questioned whether Bush's cost estimates were realistic.

"It doesn't compute,'` says Bruce Vladek, a health policy professor at Mount Sinai School of Medicine in New York.

Vladek, a former administrator of the Health Care Financing Administration in the Clinton administration, also said he doubted whether states are prepared to carry out Bush's plan to run his short-range prescription drug plan through block grants from the federal government.

Only 23 states, including Maryland, have programs that provide supplemental drug coverage. Many of those programs serve relatively few people, according to Vladek, and they may not be geared to handle large numbers of seniors.

From a political standpoint, Bush's proposal may allow him to one-up his Democratic rival on the prescription drug issue. Gore's own plan would be phased in between 2002 and 2008; Bush's is designed to go into effect next year.

"Gore talks about `the people vs. the powerful,' " Bush said. "For eight years, he has been the powerful, and on health care, he has little to show for it."

But Bush conceded that Medicare reform "will not happen at all" without support from both major parties, something that President Clinton and Congress have been unable to generate.

Donna Shalala, Clinton's secretary of health and human services, pointed out that once Bush's full plan kicks in, it would rely on managed care companies to provide benefits. Managed care companies already are balking at providing those benefits. Last year, Shalala said, 1 million Medicare recipients were abandoned by health maintenance organizations that chose to drop out of Medicare.

"There's no security in what Governor Bush has offered," she said.

In tackling the long-term financing problems of Medicare, Bush said he would not raise the eligibility age or increase payroll taxes. His plan is modeled on a bipartisan measure, co-sponsored by Sens. Bill Frist, a Tennessee Republican, and John B. Breaux, a Louisiana Democrat, that has gone nowhere in Congress.

Under Bush's proposal, prescription drug coverage would be provided free to seniors who earn less than $11,300 a year or couples with incomes under $15,200.

Seniors who earn up to $14,600 a year (or $19,700 for couples) would receive a significant subsidy for their drug costs. This group would include a somewhat larger number of seniors than Gore would cover under his drug-benefit plan.

Seniors earning more than those amounts would have one-fourth of the cost of their drug coverage premiums subsidized by the government under Bush's initiative.

"This plan will mean that every low- to moderate-income senior in America will be able to afford prescription drug benefits," Bush said. "Every single one."

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