Bush Pushes for Expanded Private Role in Medicare

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Bush Pushes for Expanded Private Role in Medicare

By Amy Goldstein and Helen Dewar
Washington Post, June 24, 2003

Addressing the Biotechnology Industry Organization, President Bush urged the industry to lobby for a program to fight bioterrorism. Carl B. Feldbaum, president of the group, is at right.

President Bush yesterday renewed his call for market competition to play a large role in Medicare's future, as the Senate wrestled over how far to go in encouraging private health plans to deliver care and prescription drug coverage to older Americans.

Bush disparaged a core tradition of Medicare, in which the federal government has determined what medical services are covered and how much the government pays doctors and hospitals to provide them. He said Medicare would be more effective if "health plans compete for their business and give them the coverage they need, not the coverage that a Washington bureaucrat thinks they need."

The president's remarks did not advance his stance significantly beyond a general framework for Medicare that he set forth last winter -- or beyond a formal explanation of the administration's preferences that the White House sent to the Senate last week. Nevertheless, his pointed comments amounted to a strategically timed presidential nudge as the Senate and the House prepare to pass landmark Medicare legislation later this week.

Both the Senate and House versions would cost $400 billion over the next 10 years and would create the first government subsidies to help Medicare's 40 million recipients pay for medicine. The House version would tilt the program further towards the private health care marketplace, which Bush favors. It would eventually require the traditional fee-for-service part of Medicare -- to which nearly nine patients in 10 belong -- to compete against private health plans.

"We need to keep rewarding innovation and protecting competition without unnecessary intervention by the government," Bush told the annual meeting of the trade group for the nation's biotechnology industry. "When the government determines which drugs are covered by health insurance and which illnesses are treated, patients face delays and inflexible limits on coverage."

The president reiterated his accusation, first leveled a month ago, that the European Union is exacerbating starvation in Africa by opposing genetically engineered crops. "For the sake of a continent threatened by famine, I urge the European governments to end their opposition to biotechnology," he said.

And he sought to enlist the biotechnology industry in lobbying for a $5.6 billion investment over the next decade to research and develop vaccines and treatment against possible biological terrorism. Bush portrayed the expenditure on what the administration has dubbed "Project Bioshield" as a method to protect the country against deadly agents, such as smallpox, anthrax and Ebola plague. He said the effort would produce scientific ripple effects that could "provide great benefits for all humanity," such as slowing the spread of infectious diseases in developing countries.

While Bush was at the Washington Convention Center, talking up what he often calls the "compassionate" aspects of his administration's agenda, the Senate entered its second week of deliberations over legislation to redesign Medicare. Democrats and Republicans clashed over the proposal to expand subsidies for drug benefits for low-income seniors and remained divided over how to allocate about $12 billion between incentives for private health plans and traditional Medicare.

Over GOP objections, Democrats postponed until today a vote on a proposal by Sen. Jeff Bingaman (D-N.M.) to drop a proposed "assets test" that could force low-income people to lose some of their drug subsidy if they have cars, insurance policies or other assets of more than $4,000 for an individual and $6,000 for a couple, excluding homes.

Taken by surprise when Republicans tried to force a vote last night, Bingaman said he thought they wanted to kill the proposal before he had a chance to round up more votes. He said his proposal would cost about $4 billion over 10 years and he believed Republicans would prefer to use the money to help private health plans expand their role in providing health care for Medicare beneficiaries.

This was also the nub of a dispute over the $12 billion that Congress can spend on the prescription drug benefit and still stay within the $400 billion ceiling set by the 2004 federal budget. Republicans, bolstered by a weekend of White House lobbying, want to use the money to help private plans expand their Medicare business and to keep employers from dropping health benefits for retirees. Democrats want to use at least half the money to expand benefits under traditional fee-for-service Medicare.

"The foundation of the bipartisan compromise [on the bill] is a level playing field between Medicare and private plans," said Sen. Edward M. Kennedy (D-Mass.). "What conservative Republicans are now trying to do is rig the system in a way that would coerce senior citizens away from Medicare and into private plans."