Republican Medicare Plan Faces Challenges




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Republican Medicare Plan Faces Challenges

by Amy Goldstein and Helen Dewar, the Washington Post

November 17, 2003

Senate Majority Leader Bill Frist (R-Tenn.), left, and Rep. Bill Thomas (R-Calif.) are part of a team that has been negotiating House and Senate Medicare bills for months.

Republican leaders on Capitol Hill began to detail an agreement that would transform the government's compact with the 40 million Americans on Medicare, as they embarked yesterday with the White House on a campaign to sell their plan to a public and Congress that are divided on the issue.

President Bush immediately pronounced himself an ally of the plan, which would add prescription drug coverage to the health insurance program and try to motivate older patients to join private health plans. But the difficult work of pushing the legislation through Congress, with just a week remaining before the body adjourns, also quickly became evident.

Edward M. Kennedy ( Mass. ), the Senate's most influential Democrat on health issues, said the measure would not pass that chamber. In the House, it was less clear how much opposition persists among the conservatives who have been expressing doubts for weeks, although one of them said he believed most conservatives would be disappointed by the agreement.

Senate Majority Leader Bill Frist (R-Tenn.), two powerful GOP House committee chairmen and a pair of Senate Democrats -- the nucleus of a team that has been negotiating House and Senate Medicare bills for several months -- acknowledged at a rare Sunday news conference in the Capitol that most of their colleagues do not yet know what the agreement contains.

Even as they released an outline of the accord, tested their sales pitches and prepared for final votes within a week, the leaders said that the 1,100-page bill is not entirely written and that congressional budget analysts will not determine at least until late today how the plan fits within the $400 billion Congress has set aside for it.

The most popular aspect of the legislation would offer federal help to elderly and disabled people in paying for prescription drugs. Next year, the government would coordinate a network of private drug discount cards that Medicare patients could buy. In three years, the federal drug coverage would begin.

But the six-page outline released yesterday made clear that the drug benefits would be only a fraction of a plan that would alter the health benefits Medicare provided, the amount people would have to pay for them and -- if the plan worked -- where older Americans received their care. The legislation also would give an unprecedented increase in payments -- totaling at least $25 billion -- to doctors and hospitals in rural areas. It also would eliminate planned reductions in payments to physicians nationwide, giving them more money instead.

House Ways and Means Committee Chairman Bill Thomas (R-Calif.), the lead negotiator and a longtime proponent of redesigning Medicare, said the agreement sought to provide better benefits while preventing the financially fragile system from running out of money through what he called "a fairer sharing of costs."

Specifically, Medicare would abandon its tradition of providing everyone in the program the same benefits for the same price. People with incomes of more than $80,000 would be charged higher premiums for the part of the program that covers doctor visits and other outpatient services. And regardless of income, the yearly deductible that patients pay for that outpatient care, fixed at $100 for years, would increase annually starting in 2005.

At the same time, the bill would give extra help to low-income patients as well as to states, which successfully fought for Medicare to take over some state outlays for people on Medicare who are poor enough also to qualify for Medicaid -- a separate public health insurance program.

Republicans hailed the agreement for including measures they said would lower the cost of medicine for people of all ages. One particularly contentious provision would let Americans import U.S.-made drugs from Canada , where they are sold at lower government-controlled prices. Such purchasing, however, could begin only with the permission of federal health officials who have openly opposed the idea, according to the agreement, which still was being finalized in that area.

In addition, the agreement would try to make lower-priced generic drugs more widely available by rewriting patent law to try to prevent brand-name drugmakers from delaying the sales by companies that manufacture generics.

The part of the bill that has produced the most vehement disagreements -- how much the traditional Medicare program should be required to compete for patients against new private health plans -- ended in a compromise that both Democrats and Republicans said leaves them somewhat uncomfortable. Under that compromise, the government would, starting in 2010, sponsor experiments in six metropolitan areas in which private plans would enter a head-to-head price competition with the original fee-for-service part of the program to which nearly nine in 10 Medicare patients now belong.

The compromise attempts, to some extent, to buffer patients who prefer to stay in the original program from possible cost increases where those experiments take place.

The agreement also includes new subsidies and tax breaks to try to deter the nation's employers from abandoning drug coverage for their retirees once federal benefits became available.

Sen. John Breaux (La.), one of the two Democrats who has been allowed to take part in the bargaining over separate Medicare bills the Senate and House passed in June, said yesterday that some liberals and conservatives alike "will find fault" with the agreement. But he extolled it as "the best and last opportunity to do what is right for seniors."

And Sen. Max Baucus ( Mont. ), the other Democratic negotiator, said: "I am going to work to make sure it passes by a large majority."

But Kennedy signaled the possible peril to the legislation's chance of becoming law. The senator, who played a key role in shepherding a more bipartisan version of the bill through that chamber, said on CBS's "Face the Nation": "I don't think that bill will pass the United States Senate."

Senate Minority Leader Thomas A. Daschle (D-S.D.) said on "Fox News Sunday" that it was too early to say whether Democrats would try to defeat the measure through a filibuster, which would require 60 votes. But he, too, criticized it, and he issued a statement later in the day that said: "The more Democrats learn about this plan, the more concerned we become." His statement cited three major Democratic concerns: "It keeps drug prices high, causes 2 to 3 million retirees to lose drug coverage and coerces seniors into HMOs."

The decision whether to try to block the legislation is difficult for Senate Democrats. They were the original proponents of a Medicare drug benefit, and they may not be able to pass such a program in the future, when budget pressures intensify. Many of them believe the bill's strategies to increase competition from private health plans could undermine the original Medicare program. On the other hand, they are sensitive to GOP accusations that they are obstructionist, particularly at a time when Republicans have been criticizing them for blocking a few of Bush's judicial nominees.

At the White House yesterday afternoon, Bush said, "I will be actively pushing the bill." He added, "I think there's going to be immense pressure on members of both the House and the Senate to support this bill."

Yet there were signs that the GOP is not unified on the issue.

A key Republican moderate, Sen. Olympia J. Snowe (Maine), said, "I remain deeply concerned about the specific impact this 'agreement in principle' will have in the real world for millions of Americans who count on Medicare for their health coverage, in particular the untested premium support plan," as the experiment in price competition is known.

And Jeb Hensarling ( Tex. ), a House GOP freshman who voted reluctantly for the legislation when it passed by one vote, said he and other conservatives probably would be disappointed once they saw the entire bill. He said the agreement apparently "strayed pretty far" from the original House version by calling for less private-sector competition than many Republicans favored.

Outside groups were divided. Ron Pollack, executive director of the liberal health care lobby Families USA, said the proposal "does too much to destroy Medicare and too little to help the seniors who can least afford their medicines." But the plan drew praise from lobbying groups representing physicians and hospitals that would receive larger federal payments if the bill becomes law. The influential AARP, the largest organization representing older Americans, issued a statement saying its leaders were encouraged by the agreement but would not endorse it before seeing the actual bill.