Medicare Plan's Trouble Could Offer a Lesson

By ROBIN TONER

NY Times, February 17, 2003

WASHINGTON, Feb. 16 — One month into the legislative season, the tensions over the Bush administration's $400 billion proposal for overhauling Medicare are striking — and, perhaps, cautionary for a White House trying to juggle threats of terrorism, the possibility of war and an ambitious domestic agenda.

On Capitol Hill, lawmakers have been busily shadowboxing and signal-sending over the Medicare plan, which has vast implications for the 40 million elderly and disabled beneficiaries and the politicians who have promised them prescription drug benefits for many years.

Few lawmakers know what the administration really has in mind for Medicare, the popular government health insurance program, and they are not happy about being kept in the dark. Top administration officials have trooped to Capitol Hill in recent days, insisting that a draft of the plan circulated last month has been distorted by its critics.

One thing is clear: administration officials are committed to legislation that does more than create drug benefits. They also want structural changes aimed at making the program more cost-efficient and more like a marketplace of competing private plans.

Which leads, almost inevitably, to the hot political question: how much can the government encourage — some would say push — the elderly to enroll in private plans?

One change contemplated in the draft of the proposal circulated last month would require the elderly to leave traditional Medicare and join a private health plan associated with the program to get drug benefits. This has proved to be a profoundly unpopular idea in both parties, a point driven home last week by Representative J. Dennis Hastert, the Illinois Republican who is speaker of the House.

Mr. Hastert told The Chicago Tribune that such a requirement was a nonstarter and that he had told President Bush as much. "I don't think you can do it humanely," he recalled telling Mr. Bush. "I don't think you can do it politically."

This was an unusually blunt assessment from Mr. Hastert, ordinarily a taciturn man. He subsequently issued a clarification that he had been talking about the perception of the president's plan, not the plan itself. But the signal had been sent.

A House Republican strategist said the fear was that the administration would produce a plan that simply could not pass. Some Republicans prefer that the administration stick to broad principles, and leave the details to Congress.

In the Senate Finance Committee, an essential venue for any Medicare deal, there are also strong feelings that the administration needs to work more closely with lawmakers who have been dealing with this issue for years. And the clock is ticking, said Senator Charles E. Grassley, Republican of Iowa and chairman of the committee. Mr. Grassley said that Senator Bill Frist, Republican of Tennessee and the majority leader, wanted the Senate to act on a Medicare bill by the Fourth of July.

Mr. Grassley, in an interview Friday, said he was optimistic that the "the White House is going to work with us on developing legislation." He reiterated, though, that the idea of requiring the elderly to leave traditional Medicare to get drug benefits was not going anywhere. "It's a philosophical thing for me," he said.

Senator John B. Breaux, Democrat of Louisiana, a member of the Finance Committee and a longtime advocate of a more market-oriented Medicare, said he believed the administration was "in the process of getting an assessment of what people's concerns are." But obviously, Mr. Breaux said, the Medicare plan has had "a rocky road."

In the end, the early troubles may prove meaningless; the next few months will be consumed by tax legislation in the House, and there is still time to steady the drive for Medicare legislation. But not that much time, given the presidential campaigning that will intensify next fall. And, of course, the possibility of war, and the continual fears of another terrorist attack, which inevitably drain the political energy from the domestic agenda.