‘Historic’ Day for America’s Seniors, Bush

Reviving a theme of his first run for the White House, President Bush signed the Medicare prescription drug bill into law on Monday, calling the legislation’s overhaul of health care for 40 million elderly and disabled Americans “a great achievement of a compassionate government.”

But hours after Bush signed what he called a “historic piece of legislation” before 2,000 health industry lobbyists, government employees, AARP members and other supporters, Democratic lawmakers led a rowdy rally of several hundred retirees and union members who pledged to work to repeal key parts of the law and improve the drug benefit.

The dueling events foreshadowed what will likely be a central focus of the 2004 election campaign: Republicans will say that the $400-billion prescription drug bill is an example of what they can do when they control Congress and the White House, while Democrats will argue that Medicare and other government programs will be destroyed unless their party is returned to power.

At the celebratory campaign-style bill signing -- held not at the White House but at Daughters of the American Revolution Constitution Hall, a venue more often used for opera or rock concerts -- Bush praised the law’s emphasis on private health plans and tax-sheltered health savings accounts.

“We show our respect for seniors by giving them more choices and more control over their decision-making,” he said. “And as we move to modernize and reform other programs of this government, we will always trust individuals and their decisions, and put personal choice at the heart of their efforts.”

Under Medicare’s traditional fee-for-service program, beneficiaries already can select doctors and hospitals; Medicare managed-care plans are available in some areas. By offering a prescription drug benefit that will be delivered by government-subsidized private insurance plans, the new law will encourage seniors to opt out of the traditional Medicare program.

Former House Speaker Newt Gingrich, a Republican lightning rod on health-care issues, said the law’s $7-billion expansion of tax-free savings accounts for Americans of all ages made it “as historic as the 1965 bill” that created Medicare.

The accounts, which individuals with high-deductible insurance policies can use to accumulate savings for health-care expenses, will balance the nation’s current employment-based health-insurance system by creating “a positive way for people to migrate back to more choice,” Gingrich said in an interview after the signing ceremony.

Democrats argue that the accounts will encourage employers to reduce or curtail the health-care benefits they offer. A bill being introduced today by Sen. Edward M. Kennedy (D-Mass.) and Rep. John D. Dingell (D-Mich.) would repeal the savings accounts, a cost-containment provision, $14 billion in subsidies and incentives to private plans, and a pilot project putting traditional Medicare in competition with private plans in six areas.

Karen Ignagni, president and chief executive of the American Assn. of Health Plans, a Washington-based trade group for private health plans, said the law’s financial incentives for health-maintenance and preferred-provider organizations were key in ensuring their participation in the reformed Medicare program. Private plans “want to serve this market,” she said at the signing ceremony.

Under the new law, special drug discount cards will provide some savings until the full prescription-drug benefit takes effect in 2006. Under that benefit, most seniors would be able to buy prescription drug coverage for a start-up premium of about $35 a month. After seniors pay a $250 deductible, Medicare would cover 75% of annual drug costs up to $2,250 and 95% of expenses above $5,100, but nothing for drug costs between $2,250 and $5,100. Low-income seniors have more generous benefits.

The Kennedy-Dingell legislation also would close, over a period of years, the law’s $2,850-gap in the standard drug benefit, allow the importation of certifiably safe U.S.-made drugs from Canada and permit the government to negotiate directly with drug companies for lower prices.

“Who do you trust to fix this bill?” Kennedy asked a standing-room-only crowd of angry seniors who had traveled to Capitol Hill from as far away as northwestern Pennsylvania.

“The Democrats!” they hollered back.

AARP, the 35-million-member seniors organization whose eleventh-hour endorsement of the Medicare reform legislation attracted critical Democratic votes in the Senate, also would work to improve the drug coverage, spokesman Steve Hahn said at the signing ceremony.

“We’re very supportive of anything that’s going to strengthen this,” he said. And although close to 20,000 seniors have canceled their AARP memberships because of the group’s endorsement of the legislation, most members see the new law as “a half-full glass instead of half-empty,” Hahn said.

That was the view of seven AARP members who traveled from Jefferson County, W.Va., to watch Bush sign the bill. Isabelle Ebersol, 83, who said she saved about $50 a month by getting her acid reflux medication from Canada, was disappointed that the new law did not legalize such purchases.

But the hole in the drug benefit motivated AARP members Elisabeth and Marvin Jackson of Montgomery Village, Md., to attend the Democratic rally in a cramped Senate hearing room.

“What happens to the in-between time?” asked Elisabeth Jackson, a 67-year-old breast cancer survivor. “That’s a lot of money when you’re a senior on a fixed income and you’ve saved all your life for your retirement.”