Bush unveils health reform

Medicare proposal would encourage seniors to use private programs

Prescription drugs covered

Staying in current system could prove penalty, say critics in Congress

March 05, 2003|By Julie Hirschfeld Davis | Julie Hirschfeld Davis,SUN NATIONAL STAFF

WASHINGTON - Reigniting a fierce debate, President Bush laid out a Medicare reform plan yesterday that would encourage seniors to leave the traditional program and join private health care plans, which for the first time would cover prescription drugs for the elderly.

The proposal faces a rough journey in Congress, where some lawmakers complain that it would penalize people who choose to stay in the current Medicare program. Those who stay in that program would not receive comprehensive drug coverage but would receive modest subsidies for their drug costs.

Democrats attacked Bush's proposal as a backdoor attempt to privatize Medicare and deprive seniors of guaranteed federal health benefits.

The president is seeking to strike a balance on the volatile issue of adding drug coverage to Medicare, while also moving to modernize the health care program that serves 40 million elderly and disabled Americans.

Government help for prescription drug costs is an urgent priority for many seniors and thus for lawmakers in Washington. But any effort to alter the enormously popular Medicare program carries political peril.

"A modern Medicare system must offer more choices and better benefits to every senior - all seniors," Bush said in a speech to the American Medical Association. "All seniors should have help in buying prescription drugs."

Sen. Charles E. Grassley, the Iowa Republican who chairs the Finance Committee, said he was wary of a proposal that offered far less generous aid to those who opt to stay in traditional Medicare than to those who transferred into a private plan.

"The question I need to answer is, does this take care of the needs of enough people so there's not a club over their head to go into the new plan?" Grassley said.

`Important first step'

With yesterday's proposal, Bush sought to get his Medicare plan back on track after a badly botched initial roll-out in January that alienated key Republican allies. That earlier proposal - which offered no drug benefits for those who stay in the traditional Medicare program - drew criticism even from House Speaker J. Dennis Hastert, an Illinois Republican.

Hastert called Bush's latest plan "an important first step" and a "solid proposal."

"It is now our turn to fill in the details and get good legislation to the president's desk for his signature," he said.

For five years, Congress has tried to reach the bipartisan deal that would be needed to provide prescription drug benefits under Medicare, which now offers no such coverage. Demand for such coverage has escalated as drug prices have risen exponentially and the solvency of Medicare has been threatened by the impending retirements of baby boomers.

Senate Majority Leader Bill Frist, a Tennessee Republican who is also a surgeon, said he felt "very positively" about Bush's proposal.

"It gives seniors the option to choose the sort of health plan that best meets their needs," he said. "It offers an element of universality to prescription drugs."

But other key Republicans expressed deep concerns about the Bush plan, projected to cost $400 billion over 10 years. They said it could shortchange seniors who want to stay in traditional fee-for-service Medicare.

"With this proposal, the president has taken a step in the right direction, but he has not gone far enough," said Sen. Olympia J. Snowe, a Maine Republican. "Every senior should have access to comprehensive prescription drug coverage, regardless of which Medicare option they choose."

Democrats said they would offer a plan similar to what they proposed last year, costing $800 billion over 10 years. They said their plan would offer all seniors a drug benefit through Medicare, direct the government to negotiate discounts and speed the process of getting cheaper generic drugs to market.

"We need a comprehensive benefit, we need it under Medicare, it ought to be provided this year, and anything short of that is a real disservice to seniors and will undermine the very viability of Medicare," said Senate Minority Leader Tom Daschle, a South Dakota Democrat.

Under the Bush plan, seniors would have a choice of three options. If they remained in the traditional program that about 85 percent of them are in now, they would receive a discount card that could save them 10 percent to 25 percent on prescription medicines. The government also would provide "catastrophic" coverage after the recipients' drug costs had exceeded a certain level.

Seniors who opted for a new, "enhanced Medicare" option - the one the administration hopes most will choose - could join one of a menu of private fee-for-service plans that would cover prescription drugs, preventive care and catastrophic drug costs. This option would be modeled on the program that federal employees enjoy.

Seniors would also have the choice, as they do now, of joining a Medicare managed-care plan, which would include government-subsidized drug coverage.

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