Bush’s Remedy for Medicare Raises Doubts

President Bush, laying out his proposal for a free-market overhaul of Medicare, started the clock Tuesday on what could be a momentous debate on how to give seniors prescription-drug coverage without jeopardizing the long-term survival of the costly insurance program.

Speaking to the American Medical Assn., Bush cited Medicare’s lack of prescription-drug coverage as just one example of how the 38-year-old government-run program had failed to keep pace with medical advances and the scope of private health benefits.

“Compared to people with private health plans, Medicare patients have limited choices,” he said.

Although few in Congress disagree with the president’s diagnosis of a health plan in need of modernization, many decried his chosen remedy: Using the promise of prescription-drug coverage and other new benefits to encourage Medicare’s 40 million beneficiaries to switch from fee-for-service medicine to less costly managed-care plans.

“The president’s plan is, if not dead on arrival, coming in through the intensive-care unit,” said Sen. Bob Graham (D-Fla.).

“The president has taken a step in the right direction, but he has not gone far enough,” said Sen. Olympia J. Snowe (R-Maine). “Every senior should have access to comprehensive prescription-drug coverage, regardless of which option they choose.”

But between the lines of the critical or lukewarm statements by many lawmakers Tuesday ran a current of gratitude: Now we can get down to work.

Administration officials said the president had left his framework for Medicare reform purposely vague and was counting on Congress to fill in the details. But as Congress resumes the business of crafting a Medicare prescription-drug benefit, it was unclear whether even the president’s framework would stand.

Bush’s plan would offer Medicare beneficiaries three coverage options, at a total estimated cost of $400 billion over 10 years.

Those who stayed in traditional, fee-for-service Medicare would receive minimal help with the cost of medicines. They could save 10% to 25% off the price of most medications, and 100% on all costs that exceeded an unspecified but very high amount.

In “enhanced Medicare,” the centerpiece of the Bush plan, beneficiaries could choose from among a minimum of three health-care plans that offered subsidized prescription-drug coverage, free preventive-health services and a limit on hospital bills. To get the drug coverage, beneficiaries would pay a monthly premium and an annual deductible.

Administration officials took issue Tuesday with media reports that described the enhanced Medicare option as a choice of managed-care plans, including preferred-provider organizations.

“This is not managed care, this is member-of-Congress care,” said White House spokesman Ari Fleischer. “This is the same coverage that’s available to members of Congress, and the president thinks if it’s good enough for members of Congress, it should be good enough for our nation’s seniors.”

Bush, in his speech to the medical association, referred to enhanced Medicare as a “fee-for-service arrangement.”

Finally, the administration’s Medicare Advantage program would offer enrollment in health-maintenance organizations.

John Rother, director of policy and strategy for the seniors lobby AARP, said the president’s proposal was “moving in the right direction.” But he predicted that Bush’s framework would not survive.

“Most beneficiaries are looking for help not just with extraordinary [drug] expenses but with everyday expenses,” he said.

Medicare beneficiaries spend, on average, $2,000 a year on prescription drugs, and 24% of them have no form of drug coverage.

Sen. John B. Breaux (D-La.) defended the president’s plan, saying, “We cannot and should not add a prescription-drug benefit to Medicare without comprehensive reform to the program.”

But most Democrats and some Republicans disagree with the president’s emphasis on bringing more private health plans into the Medicare program. Only 11% of beneficiaries belong to Medicare HMOs, in part because about half the HMOs have dropped out of the program. There are no Medicare HMOs operating in many rural areas and in some states.

Most Democratic lawmakers say all Medicare needs is a prescription-drug benefit. Yet Republicans and Democrats also disagree over how generous the benefit should be and whether it should be run by the government, like the rest of Medicare, or by private insurance plans.

The Republican-controlled House passed a prescription benefit last year, but the Senate deadlocked over cost and administrative issues.

The cost of leading Democratic proposals ranges from $600 billion to $900 billion over 10 years.

*

Times staff writer James Gerstenzang contributed to this report.