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Medicare Plans Are No Cure-All in Congress

June 18, 2003|Janet Hook | Times Staff Writer

WASHINGTON — A landmark expansion of Medicare is barreling through Congress, but one part of President Bush's political base is reluctant to join the bipartisan ride: Free-market conservatives, who have argued for years that Medicare needs to be overhauled before a new prescription drug benefit is added.

While many Republicans see likely enactment of the benefit for the elderly as a political home run for their party, disgruntled conservatives see it as a public policy strikeout -- the squandering of a unique opportunity to bring fundamental, long-term change to the financially troubled program.

The bill the Senate began debating this week also is under fire from the left. While conservatives say the measure does not go far enough in reforming Medicare, liberals say it falls far short of the comprehensive drug assistance they believe seniors need.

But many liberals are supporting the bill as a foot in the door; they assume lawmakers will expand the benefit in future years. Conservatives, by contrast, despair that there will never be a better time to overhaul Medicare than while the carrot of a new drug benefit is dangling.

The House Ways and Means Committee approved a bill late Tuesday that would do more than the Senate's bill to inject competition and market forces into Medicare. But it still would move less in that direction than many conservatives had hoped. The measure won approval on a vote of 25 to 15.

"It is measurably better than the Senate bill," said Michael Franc, vice president of the Heritage Foundation, a conservative think tank. He expressed doubt, however, that it qualified as "a real reform bill."

Conservatives want changes that encourage the elderly to exercise private-sector options for health care, arguing that would increase competition and, in the process, curb Medicare's burgeoning long-term price tag.

Bush's original Medicare proposal offered a powerful incentive for the elderly to choose alternatives to Medicare's traditional fee-for-service program: Only those who signed up for private managed-care plans would get drug coverage. But that approach quickly ran aground in Congress, and the White House has indicated that Bush would be willing to sign legislation that did not include it.

Some Republicans say that retreat badly undercut any effort to accomplish broader reforms. "President Bush made it harder for us to come up with a responsible bill," said Sen. Trent Lott (R-Miss.). Conservative suspicions of the Senate bill, which won bipartisan approval by the Finance Committee last week, were fueled when it was embraced by Sen. Edward M. Kennedy (D-Mass.), the liberal icon.

"When you have Ted Kennedy out there saying, 'This is the greatest thing since sliced bread,' our members are saying, 'Why are we for this?' " said Sen. Rick Santorum (R-Pa.).

In a closed-door caucus Tuesday, Senate Republicans peppered legislative analysts with questions about the cost and consequences of the complex measure.

"The more you dig down into it, the more questions our caucus has about it," said Sen. Charles Hagel (R-Neb.).

Still, GOP leaders predicted that the bill would pass the Senate with broad support by the end of next week. The House bill is expected to win the chamber's approval next week, setting up negotiations on a final measure.

The House and Senate bills are similar in many respects. Both would provide $400 billion over 10 years to add a prescription drug benefit to Medicare and change the program to expand the role of private medical networks, such as preferred-provider organizations.

Under the Senate bill, beginning in 2006 the government would pay half of beneficiaries' drug costs up to $4,500 a year, and 90% once out-of-pocket expenses exceeded $5,800. Beneficiaries would pay a premium averaging $35 a month, and have a deductible of $275 a year.

Beneficiaries could get drug coverage by joining a PPO or other managed care plan participating in Medicare. Alternatively, they could remain in Medicare's traditional fee-for-service program, and obtain drug coverage from a stand-alone policy from a private insurer. If at least two such drug policies were not available in a given region, the government would step in as a fallback.

Whether beneficiaries chose a private plan or stayed with Medicare, they would receive identical drug benefits.

Conservative critics have said that means there would be little incentive for people to switch to a private plan. Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) acknowledged he might have to change the bill to address those concerns.

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