Lawmakers inching closer on Medicare overhaul bill

Progress is reported, but contentious issue of competition remains

October 25, 2003|By Julie Hirschfeld Davis | Julie Hirschfeld Davis,SUN NATIONAL STAFF

WASHINGTON - Negotiators on Capitol Hill edged closer yesterday to finalizing key proposals for a Medicare prescription drug bill. But they remained deeply divided over whether and how to bring private competition to the 38-year-old health program for the elderly and disabled.

That issue has emerged as the main obstacle to agreement on the $400 billion Medicare measure, which would add a prescription drug benefit to the program that serves 40 million Americans.

Long a source of sharp disagreement between Republicans and Democrats, the idea of having Medicare compete with private health plans threatens to stall enactment of the landmark prescription drug bill.

The measure has been locked in a House-Senate conference committee for two months. Republican negotiators want to settle on their positions next week, and congressional leaders hope a bill will be ready for final approval within two weeks.

Republicans are eager to open Medicare to competition. They argue that it is the only way to sustain a program that analysis shows will go broke if it continues to grow at current rates, especially as the bulk of baby boomers begin pouring in in 2010. Democrats fear such a move would raise costs for the poorest and sickest seniors and end the guaranteed nature of the popular program.

"The 800-pound gorilla has not been wrestled to the floor," said Sen. Max Baucus, a Montana Democrat, emerging from negotiations.

House Republicans appeared to ease their insistence on a provision in their version of the bill known as "premium support." Starting in 2010, this provision would let private companies compete with Medicare to provide health coverage to seniors. The government would give seniors a fixed sum to help pay the premiums of either Medicare or a private insurer of their choosing.

"It doesn't have to be in the same form" as the House-passed provision, Rep. Bill Thomas, the California Republican who is chairman of the Ways and Means Committee, said as negotiations ended for the day.

But Thomas, who is chairman of the Medicare conference committee, made clear that the final bill must include a heavy dose of private competition to pass in the conservative House.

"In the House, you can't pass a simple $400 billion expansion of the Medicare program which is not sustainable," he said. "To say that it's off the table, and all we're doing is talking about adding a $400 billion cost to the current Medicare program, I can assure you, that's not doable."

The opposite is true in the more centrist and evenly divided Senate, where Democrats say the Republican vision of a competitive Medicare is, in the words of Minority Leader Tom Daschle, a South Dakota Democrat, "a showstopper."

"It's become so clear to so many senators and House members that we can't have premium support," Baucus said.

As for other options Republicans might be considering to bring competition to Medicare, he added later, "I haven't heard anything that I think passes muster."

Neither Thomas nor other negotiators or top aides would provide details about the alternatives under consideration.

"There are a number of us who are committed to the notion of competition," said Rep. Billy Tauzin, the Louisiana Republican who leads the Energy and Commerce Committee.

"How you achieve it is less important than that you achieve it. It could be something that's not premium support, but it could be with premium support - we're still looking at that."

Baucus is one of just two Democrats - the other is Sen. John B. Breaux of Louisiana - who have been invited into private bargaining sessions with 10 Republicans to seek common ground on the Medicare bill.

Sen. Charles E. Grassley, the Iowa Republican who leads the Finance Committee, said yesterday's talks had "probably been the most productive day of two months of conferencing."

Negotiators have drafted proposals on the structure of the drug coverage seniors would receive and the degree of government aid that low-income beneficiaries would get, Baucus said.

The mostly Republican group has tentatively agreed to a drug benefit that would have seniors pay a $35 monthly premium and a $275 yearly deductible, then have the government cover 75 percent of their prescription costs up to $2,200.

At that point, seniors would have to cover their own drug costs until they had paid a total of $3,600. Medicare would pay for all but 5 percent of any remaining medicine costs.

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