President endorses Medicare agreement

Bill includes drug benefit and private competition

key Democrats oppose it

November 17, 2003|By Julie Hirschfeld Davis | Julie Hirschfeld Davis,SUN NATIONAL STAFF

WASHINGTON - Top Republicans are pushing for final congressional approval this week of the most extensive overhaul of Medicare in its 38-year history after reaching agreement over the weekend on a bill that would add a prescription drug benefit and test a contentious approach that would put the program in competition with private health insurers to cover the elderly.

President Bush endorsed the deal yesterday as congressional leaders released details on Capitol Hill. He urged lawmakers to "get it to my desk as soon as possible" and vowed that he will be "actively pushing the bill."

But key Democrats, including Sen. Edward M. Kennedy of Massachusetts, one of his party's strongest voices on health issues, are calling the measure a bad deal for senior citizens and have signaled that they might try to kill it.

The bill would set aside $400 billion over the next decade to provide drug coverage to Medicare's 40 million beneficiaries, which would accomplish a goal long demanded by seniors - who vote in disproportionately large numbers - and championed by both political parties.

At the same time, in a bid to control costs in the rapidly growing government health program for the elderly and disabled, the bill would start an experiment in 2010 in which Medicare would bid against private health insurers to cover seniors in certain areas.

Republicans and two centrist Democrats who helped cut the deal, Sens. Max Baucus of Montana and John B. Breaux of Louisiana, hailed the agreement as a landmark revision of Medicare and the fulfillment of what could be Congress' last chance for years to improve the program.

"We are on the final few steps of truly historic change," said Senate Majority Leader Bill Frist, a Tennessee Republican.

"We must not let this time pass. We have $400 billion on the table," Baucus said. "We have an agreement in front of us that will work for our seniors and for our disabled."

Baucus was careful yesterday to refer to the deal as a "tentative agreement in principle," saying that until he sees the final language and cost estimates, it is "subject to review." But he left little doubt that he would support the final package and encourage other Democrats to do so.

`A partisan attack'

Kennedy, on the other hand, called the agreement "a partisan attack on Medicare" that "will leave millions of seniors worse off than they are today, with higher premiums and higher drug costs."

Appearing on Fox News Sunday, Senate Minority Leader Tom Daschle, a South Dakota Democrat, said it was "too early to say" whether his party would try to block the measure with a filibuster.

Lawmakers and aides are working to put the finishing touches on the legislation today, in preparation for a vote in a House-Senate negotiating conference that could come tomorrow and final votes in the House and Senate as early as this week. The measure has been finalized in sometimes-tumultuous closed-door negotiations that excluded all Democrats but Baucus and Breaux.

Full prescription drug coverage under Medicare would begin in 2006. Until then, seniors could use a Medicare-sanctioned card giving them discounts of 10 percent to 25 percent on prescriptions.

In 2006, Medicare would offer drug coverage for seniors for about $35 a month. After meeting a $275 deductible, 75 percent of drug costs between $276 and $2,200 would be subsidized by the government. Beyond that, beneficiaries would pay all prescription drug expenses until they had spent $3,600 out of pocket. At that point, the government would step in again to cover 95 percent.

Low-income seniors would get additional subsidies for prescription costs.

Competition

The measure would give Medicare beneficiaries the choice of staying in Medicare or joining private preferred-provider organizations, or PPOs, that offer integrated coverage for medicine and health services. It would set aside about $12 billion for payments to private insurers to encourage them to cover Medicare beneficiaries.

Under the competition provisions, the federal government would begin a six-year experiment in 2010 in six yet-to-be-chosen regions of the country in which Medicare would compete with private insurers to cover senior citizens.

Seniors could opt to stay in the traditional Medicare program or go into the private plans, but their premiums could rise if they choose the government-run system. The measure would protect the poorest seniors from those premium increases and limit others to an increase of 5 percent per year.

Still, many Democrats and a handful of moderate Republicans have long expressed grave concerns about the approach - sometimes called "premium support" - even as a limited test project. They say the test would put as many as 6 million seniors at the mercy of profit-driven private companies and leave Medicare covering the poorest and sickest, nudging their health care premiums ever higher.

Such an approach, Kennedy said, "is the beginning of the end of the Medicare system as we know it."

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