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Bush Offers Plan on Health Care

Campaign: He promises to overhaul Medicare and give seniors drug coverage.


ALLENTOWN, Pa. — Charging that the Clinton administration has reneged on its promise to mend Medicare, Texas Gov. George W. Bush on Tuesday proposed a $198-billion overhaul of health care for seniors that would provide at least some prescription drug coverage for all elderly Americans.

Bush would spend $110 billion over 10 years to "modernize" the 35-year-old Medicare system, which helps pay for the health care of 39 million elderly and disabled Americans.

Unlike Vice President Al Gore, who would expand the Medicare system, Bush would change the program by allowing seniors to remain in Medicare or choose annually from a range of private plans, including those offered by health maintenance organizations. If passed by Congress, it would amount to the largest structural change in Medicare since its inception.

The Bush plan would subsidize the cost of prescription drug coverage for seniors at all income levels to some extent, and it would pay all drug costs for the lowest income seniors--individuals living on less than $11,300 a year or couples with a household income of up to $15,200.

Bush envisions a four-year transition period in which the federal government would give the states $48 billion in grants to provide what he calls an "immediate" prescription drug benefit for the very poorest seniors, along with paying all drug costs for seniors above $6,000 a year.

In addition, he endorsed congressional efforts to restore cuts to Medicare providers, such as hospitals and doctors, that were enacted in 1997 as part of the federal Balanced Budget Act. The cost would be $40 billion. Gore also supports such Medicare restoration efforts at the same level.

"Eight years ago, Bill Clinton and Al Gore promised Medicare reform," Bush said as he unveiled his plan at a senior residence here. "Four years ago, they did the same. This is a patient country, but our patience is wearing thin. This is not a time for third chances; this is a time for new beginnings and new leadership."

In a prosperous, peacetime election year, with the debate driven by the interests of aging baby boomers and their elderly parents, health care--and particularly Medicare reform--has rapidly gained momentum as a campaign theme.

Adding to the urgency of Medicare reform efforts is the fact that the number of Americans receiving benefits is expected to double in the next 30 years as the number of workers paying into the system drops.

Plan Doesn't Slow Democrats' Attacks

Democrats have spent the last several weeks chastising Bush for making health care reform promises without particulars. Although Bush has run a campaign ad vowing to offer prescription drug coverage to seniors, until Tuesday he had given no details about how he would accomplish the politically tricky feat.

Gore wasted no time Tuesday deriding the Republican presidential nominee's plan, charging that it would force seniors into bare-bones HMOs if they want prescription drug coverage and would leave millions of elderly people without coverage for necessary medicines.

Campaigning in Columbus, Ohio, Gore said that "the biggest problem" with Bush's plan is that "there is no money to pay for it" after the 10-year, $1.3-trillion tax cut that Bush also has proposed.

Gore has rejected the kind of fundamental changes in Medicare touted by Bush. Instead, the Democratic nominee for president wants to add to the existing program a guaranteed prescription drug benefit for all seniors at a cost of $253 billion over 10 years. That amount does not include restoration of Medicare cuts to doctors and hospitals.

Today, more than 80% of seniors receive health care in the traditional Medicare "fee for service" program, under which the government makes payments directly to doctors and hospitals. Most of the rest enroll in HMOs.

In recent years, HMOs affiliated with Medicare have been terminating their coverage of thousands of seniors, especially in rural areas, complaining that reimbursements from the government are too low. An industry survey released in June showed that HMOs planned to cancel coverage next year for more than 700,000 seniors enrolled in Medicare HMOs.

Under the reforms Bush endorsed Tuesday, Washington would provide a fixed sum of money for seniors to purchase health insurance from a range of plans, including the existing Medicare program.

Benefits would vary from plan to plan, with the most expensive plans offering the broadest coverage, such as prescription drugs and vision and dental care. Less expensive plans would offer less generous benefits.

If a plan cost more than the sum provided by the government each year, seniors would have to make up the difference out of their own pockets.

For seniors earning 135% of the poverty rate or less, Bush would provide subsidies sufficient to cover the full cost of purchasing a plan offering prescription drugs. This would help Americans avoid what he described as the "cruel choices some seniors face: Heat or medicine. Food or pills."

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