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GOP Updates a Page From Great Society

November 26, 2003|Janet Hook | Times Staff Writer

WASHINGTON — It is the health-care equivalent of President Nixon's going to China: The biggest expansion of Medicare since its inception has been approved on the watch of a Republican Congress and a Republican president.

This implausible product from the party of limited government is the culmination of years of snowballing pressure on Congress to provide drug coverage to senior citizens, who often face crippling pharmaceutical bills.

The party that called for major reductions in the growth of Medicare in the mid-1990s under House Speaker Newt Gingrich of Georgia is now eagerly embracing the addition, at a cost of nearly $400 billion over 10 years, of prescription drug coverage to the program that was a cornerstone of President Lyndon B. Johnson's Great Society.

The bill makes good on myriad campaign promises made by GOP candidates over the last five years -- including President Bush, who now heads into his 2004 reelection campaign claiming credit for breaking a years-long deadlock over prescription drug coverage.

It marks the end of a long chapter in the 38-year history of Medicare, in which the growing clamor for drug coverage topped the charts of voters' domestic policy concerns, dominated health debates in Congress and became a fixture of political campaigns.

But it is not the end of the book on Medicare: The bill, an amalgam of federal and private-sector approaches to providing drug benefits, includes a groundbreaking, but limited, experiment in introducing more market competition to the program's basic services.

The question of which approach will dominate Medicare in the long run may hinge on which party prevails in the next few elections.

"If Democrats win, they will build on the drug benefit, trying to make it more generous, and ignore -- if not pare back -- the pro-competition provisions," said Drew Altman, president of the Henry J. Kaiser Family Foundation. "If Republicans win, they will build on the private market mechanisms."

The drug coverage issue has been part of a much broader debate over the years about how to modernize Medicare and prepare for the retirement of the baby boomers -- those born between 1946 and 1964.

Drugs have become enormously more important since Medicare was established in 1965. The most common and costly medicines that are now central to treating older Americans -- such as Lipitor, a widely used anti-cholesterol drug -- were not even a gleam in a scientist's eye when the program was being hatched.

Drug coverage was added to Medicare once before, in 1988, when it was part of a package that also provided new protection against catastrophically high health-care costs. But that bill was repealed a year later in the face of a revolt by senior citizens, who realized that they alone would have to pay for the new benefits through steep new fees and premiums.

That made politicians wary of the issue, but political pressure to add a drug benefit grew along with drug prices and use. After President Clinton's 1993 health plan went down in partisan flames, Republicans began to take a more active interest in formulating conservative approaches to health-care policy.

"Historically we thought of health as a liberal Democratic issue," Gingrich said in an interview. "We concluded [in the 1990s] that this was the central reform requirement of the next generation."

After Republicans took control of the House and the Senate in 1995, Gingrich's drive to balance the budget called for significant reductions in the growth of Medicare. He championed ideas to introduce more free-market competition and consumer choice. Clinton kept such changes from being enacted, and Democrats ran thousands of political ads against Gingrich in the 1996 campaign.

Rep. J. Dennis Hastert (R-Ill.), who succeeded Gingrich as House speaker in 1999, sensed the political power of the prescription drug issue. Far from fighting the idea as an expansion of government power, Hastert developed a Republican plan and passed it through the House in 2000. It died in the Senate.

When a huge federal budget surplus materialized in 2000 and 2001, the costly drug benefit suddenly seemed more affordable.

"What really unlocked this and created a bidding war was the existence of the surplus," said Jonathan Oberlander, a professor at the University of North Carolina. "Once it got out of the Pandora's box, it was hard to leave behind" -- even when the surplus vanished.

Late in the 2000 election campaign, Bush, under fire on health issues, said he would push for a Medicare drug benefit. That became a key part of his agenda of "compassionate conservatism."

Congress considered prescription drugs again in 2002, but the bill died in the Senate, which was then back in Democratic hands. Some Republican political strategists concluded that the issue was a key factor in the Democrats' loss of control of the Senate in 2002.

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