Bush Draws a Line on Medicare

In a threat aimed at preventing a Republican revolt over Medicare, President Bush warned Friday that he would veto any attempt to scale back the program’s prescription drug benefit, whose costs were estimated to be much higher than many lawmakers had assumed when they approved it two years ago.

“I signed Medicare reform proudly,” Bush said during a swearing-in ceremony for Health and Human Services Secretary Mike Leavitt, “and any attempt to limit the choices of our seniors and to take away their prescription drug coverage under Medicare will meet my veto.”

The disclosure that the Medicare drug benefit will cost taxpayers $724 billion over 10 years -- not the $400 billion many lawmakers had thought -- has led Republican fiscal conservatives to talk of limiting drug coverage to low-income elderly, or even of repealing the benefit before it goes into effect in 2006.

Bush’s veto threat will not stop them from trying, said Rep. Gil Gutknecht (R-Minn.), who is among those seeking repeal of the drug benefit.

“In many respects, that kind of language is like waving a red flag in front of the bull,” Gutknecht said. “On issues like prescription drugs and the budget, the bulls are running.”

With Republicans controlling both chambers of Congress during most of his tenure, Bush has yet to veto a bill, and he seldom issues such direct admonishments.

But Gutknecht predicted a fight over Medicare during congressional budget deliberations and a series of confrontations with the White House throughout the year over other bills that aim to make prescription drugs more affordable.

“We have got to deal with the cost of drugs,” Gutknecht said. “We have got to force the drug companies to play by some set of rules that is fair to everybody.”

Elderly and disabled Medicare beneficiaries are supposed to begin signing up for prescription drug coverage this fall. They will get their medications through private insurance plans, but the government will subsidize the premiums.

Some Democratic and Republican lawmakers who support the drug benefit are moving ahead with two pieces of legislation that they say would help reduce costs.

One would allow Medicare to negotiate bulk discounts for medications, and the other would lift restrictions on importing lower-cost drugs from Canada and other industrialized nations. Some of these countries have government controls on drug prices.

The Bush administration is opposed to both bills. The White House says private plans would be more efficient than Medicare at negotiating discounts, a conclusion shared by the nonpartisan Congressional Budget Office. And the president has said he is concerned about the safety of drugs from abroad.

White House spokesman Scott McClellan said Bush’s warning had been intended as a “general statement.”

“There are some who would like to undermine the reforms we’ve put in place to expand benefits for America’s seniors and make healthcare more affordable,” McClellan said. “The president was making very clear to America’s seniors that we stand with you, we made a promise to you, and we’re going to keep that promise.”

Bush is also trying to prevent reopening a contentious Medicare debate at a time when he is trying to enact a controversial Social Security overhaul.

A fight over Medicare “would torpedo any chances to do Social Security,” said John Rother, the top lobbyist for the AARP, the seniors organization. “No good outcome could come from that kind of debate.”

The AARP helped Bush win hard-fought passage of the Medicare prescription benefit, but it opposes his plan for private accounts under Social Security.

“I think the president has a strong preference to see first how the [prescription drug] program plays out as designed, and then to make a judgment” over whether there is a need to go further to manage costs, Rother said.

McClellan said top Republican leaders would back the president.

“The congressional leadership, I think, recognizes the importance of putting these reforms in place,” he said of the drug benefit.

The prospect of a Republican rebellion against one of Bush’s top domestic policy accomplishments has arisen partly because of the awkward manner in which the administration released the Medicare numbers.

Bush’s budget only hinted at the new cost estimates, and the full figures were released after media and congressional inquiries.

The main reason for what seemed like an alarming increase in costs was that the original 10-year estimate of $400 billion included two years in which the program was not yet operating, and so there were no costs for those years. The new estimate of $724 billion includes 10 years of full costs. But that explanation got lost in the outcry.

“The way in which the information was presented was confusing to people,” said health economist Marilyn Moon of the American Institutes for Research. “It looked like something had changed dramatically, and they had a credibility problem left over from the debate on the original legislation.”

During the 2003 congressional debate over the Medicare drug benefit, the administration held back internal estimates that pegged the cost as higher than what congressional economists projected.

Gutknecht said the $724-billion figure shocked his colleagues in Congress: “I think every member looked at this price tag and said, ‘Oh my God, what have we done?’ ”