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Medicare Overhaul Is Plagued by Difficulties
By Robert Pear and Robin Toner
October 11, 2004, New York Times
When he signed it into law, President Bush hailed the Medicare Modernization Act of 2003 as "the greatest advance in health care coverage for America's seniors since the founding of Medicare.'' The overhaul of the program, including the addition of prescription drug benefits, was seen as his biggest accomplishment in domestic policy and a major asset to his re-election campaign.
But over the last 10 months, the Bush administration's efforts to carry out the first phase of that law, providing drug discount cards to the elderly, have been plagued with difficulties. Many health policy experts say that even greater problems loom as the government turns to the more ambitious task of providing a full-fledged drug benefit to 41 million elderly and disabled people in 2006.
Administration officials and their allies say they are making good progress in getting a huge new program off the ground, arguing that the early stages of any undertaking this big are bound to have their difficulties. Mr. Bush, defending the program in Friday night's debate, noted that he had managed to deliver the drug benefit legislation when the Democrats - including Senator John Kerry, his Democratic challenger - could not.
"I've been in Washington, D.C., for three and a half years and led the Congress to reform Medicare so our seniors have got a modern health care system,'' Mr. Bush said. "That's what leadership is all about. ''
But the new Medicare program has two broad problems so far, some experts and advocates say. Its emphasis on private market forces and consumer choice, they say, has made it too complicated for many elderly beneficiaries. And from the beginning, when the legislation was muscled through the House by Republican leaders, the program has been at the center of a poisonous partisan debate that shows no sign of easing. The Medicare issue is expected to be a major part of Wednesday's final presidential debate, which will focus on domestic policy.
The struggle has been intensified in both parties by lingering bitterness over the cost estimates used to justify the law's passage. Weeks after it was passed, the White House cost estimate shot up by one-third, to $534 billion over 10 years. Compounding the problem, a government investigation later found that the top Medicare official, Thomas A. Scully, had intentionally withheld data from Congress indicating the higher costs.
Frustrated Republicans say that Democrats are largely responsible for negative views of the law, which they say have hampered efforts to carry it out. Surveys this year have shown that the legislation is unpopular and a source of deep confusion among many elderly people.
"Week after week, month after month, we have attack after attack,'' Senator Charles E. Grassley, an Iowa Republican who is chairman of the Senate Finance Committee, said last week. Republicans say that the drumbeat of Democratic criticism is scaring the elderly away from a benefit that could be immensely helpful, and that they expect will cover almost 50 percent of drug costs for the average beneficiary and 95 percent for low-income people in 2006.
Democrats counter that they are simply speaking out against a bad law, a giveaway to the big drug companies that was pushed through Congress on the basis of faulty cost estimates and arm-twisting so intense that it drew the scrutiny of the House ethics committee.
Mr. Kerry has called the law a "bill of goods'' that Mr. Bush is trying to sell to the American people while giving "a bag of goodies to his special interest friends.''
Democratic Congressional candidates are also hitting the issue hard. Geoffrey Garin, a Democratic pollster, said that "virtually every Democrat is running on the fact that this bill prohibits the government from negotiating with drug companies for lower prices.'' Conservatives opposed any direct role for the government in delivering the new drug benefit. As a result, the benefit will be managed by private companies, which are expected to negotiate substantial discounts.
Mr. Garin said that "Democrats are raising the Medicare bill against Republicans more often than Republicans are raising it as an accomplishment - by a factor of at least five to one.''
Republican strategists say their candidates are still better off than if their party - which controls the House, the Senate and the White House - had failed to produce the long-promised benefit.
David H. Winston, president of the Winston Group, a Republican polling firm, said: "The new Medicare law has given us a level of credibility to engage in the debate on health care in a fuller way than we've been able to do in previous election cycles. It's a relatively complicated law, and people are still forming their opinions of it.''
But some Republicans, and even a few Democrats, wonder how it is possible to give away a half-trillion dollars of prescription drugs and health care without getting much political credit.
In his standard stump speech, Mr. Bush devotes only two or three brief sentences to Medicare, leaving some Republicans to suggest that the White House has done a poor job of selling the new drug benefit. The president, they say, should consistently point out that under the law, 12 million low-income people will be able to get their drugs for no more than $5 a prescription.
But the start-up problems in the new Medicare program transcend the politics of a bitter campaign season.
Dr. Mark B. McClellan, administrator of the federal Centers for Medicare and Medicaid Services, said the government had learned important lessons. "We have a much more experienced staff, and we learned how to get beneficiaries the information they need quickly and effectively,'' Dr. McClellan said.
AARP, the influential lobby for older Americans, which endorsed the Medicare law, said in publicly filed comments that one of the valuable lessons of the last 10 months was that "confusion naturally occurs when a new program or product is offered'' to the elderly.
Barbara H. Monty, director of the local Office on Aging in Knoxville, Tenn., said that "people are expressing a great deal of confusion and some frustration'' about the drug discount cards. "It seems to be complicated and difficult for them to decide how to proceed and what card is best,'' Ms. Monty said. "People know they can get information from a toll-free telephone number and on the Web, but when they do that, they are still left with questions.''
When the drug benefit begins in 2006, Ms. Monty said, "it's going to be even more complicated for people to figure out what to do.''
The cards, intended as a bridge to the drug benefit, offer savings of 20 percent or more. But many people have apparently found it difficult to choose among dozens of cards offering different discounts on different drugs.
Advocates for the elderly worry that beneficiaries will be even more confused when they try to compare private plans in 2006. Those plans can cover different drugs, with different co-payments, and each insurer can establish its own network of pharmacies.
Thomas M. Snedden, director of the state pharmaceutical assistance program for the elderly in Pennsylvania, said, "The experience of the last 10 months ought to give pause to anybody trying to bring up the benefit in 2006.'' Mr. Snedden, who has run the Pennsylvania program for 20 years under governors of both parties, added, "It's really important to keep things simple and not confuse people with too much choice.''
The Bush administration predicted that 7.3 million Medicare beneficiaries would sign up for drug discount cards this year. So far 4.5 million are enrolled, and more than half of them received cards automatically, without filing applications, because they are in health maintenance organizations.
The administration predicted that 4.7 million low-income people would get a credit of $600 a year to go with their discount cards in 2004 and 2005. So far 1.3 million people have qualified for such assistance, Dr. McClellan said.
Medicare officials predict that 41 million beneficiaries, or 95 percent of those eligible, will receive government-subsidized drug coverage in 2006. But the response to the law so far raises doubts about that estimate.
"I hope that the recent disappointing experience with the Medicare drug discount card does not portend seniors' response to the new drug benefit in 2006,'' said Senator Max Baucus, Democrat of Montana, who helped write the new law. "Montana seniors have reacted very coolly to the drug card.''
The nation's elderly could pay dearly if they delay signing up for the new drug benefit, as they have with the discount card. The drug benefit is voluntary, but the law imposes financial penalties, in the form of higher premiums, on people who postpone enrollment.
"The stakes are pretty high,'' said Patricia H. Neuman, director of Medicare policy at the Kaiser Family Foundation. "Seniors are very much unaware of what's coming their way.''
Medicare officials trying diligently to carry out the law must cope with the rough legacy left by its passage.
The House ethics committee recently scolded Representative Tom DeLay of Texas, the Republican leader, for offering a political favor to a Michigan lawmaker in an effort to win his support in an agonizing three-hour roll-call vote last November. The lawmaker, Nick Smith, a fiscally conservative Republican, said at the time that he feared the Medicare bill would "saddle our kids with a huge debt.''
The continuing partisan war over the new law contrasts with the situation when Medicare was created in 1965. Doctors who had opposed creation of the program worked with the government to carry it out.
"In a short time, the opposition, which had included the American Medical Association and many insurance companies, came together with us to make the law work,'' said Robert M. Ball, who, as commissioner of Social Security, was in charge of Medicare at the time. "It was a remarkable demonstration of American democracy.''
Democrats then had big majorities in the House and the Senate, compared with the Republicans' small margins today.
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