Bush Plans Awaited on Medicare

With just about everyone on Capitol Hill trying to figure out what the White House’s Medicare reform proposal will be, Bush administration officials continued Wednesday to say only what it is not.

“It’s complete garbage that we’re pushing people into managed care,” Thomas A. Scully, administrator for the Centers for Medicare and Medicaid Services, said Wednesday in an interview. “The president said [in his State of the Union address] that if you like Medicare the way it is, you can stay in that forever, you don’t have to change.”

While the details of the administration’s plan “have not been worked out,” Health and Human Services Secretary Tommy G. Thompson met Wednesday with directors of the seniors group AARP and told them: “I can promise you ... there’s nothing going to force you into an HMO in order to get prescription drug coverage.”

But officials’ repeated denials of reports that President Bush planned to tie seniors’ eligibility for a prescription drug benefit to participation in managed care only highlight what officials now concede was their mishandling of the issue. And their public statements about continuing consultations with Congress simply focus attention on the lack of such talks previously.

The bungled process has accentuated a key policy difference between the White House and the Republican-controlled Congress -- one that could be another potential obstacle to passage of a prescription drug benefit for Medicare’s 40 million senior and disabled beneficiaries. The administration wants to make prescription drug coverage a central part of its plan to “modernize” Medicare, while passing a drug benefit is the top priority for most Republican lawmakers.

“First and foremost, we want a drug benefit,” said John Feehery, spokesman for House Speaker J. Dennis Hastert (R-Ill.). After calling the president’s plan “unworkable” earlier this week, Hastert has issued a more equivocal “clarifying” statement.

Both administration and congressional officials declined to be quoted on exactly what happened, but from all accounts, “misperceptions” about the president’s proposal stemmed from the administration’s failure to consult GOP lawmakers earlier in the process.

“The speaker believes we need to march together on this,” Feehery said.

Bush’s proposal was “90% done” when the administration took it to some members of Congress, said one official who spoke on condition of anonymity. After seeing “just one option” being considered -- one that left beneficiaries in traditional fee-for-service Medicare without a drug benefit -- Democrats pounced and Republican lawmakers “panicked,” the official said.

Now, the administration has gone “back to the drawing board” and to the Hill, Scully said. He guessed that it could be the end of the month before the White House unveils its plan.

In the meantime, some things are clear.

The administration wants to make the Medicare program more like the private insurance market for people under 65, where roughly 64% of those with health insurance have to pay higher deductibles and co-payments if they see doctors outside a limited network. By contrast, only 11% of Medicare beneficiaries belong to HMOs, while the rest receive care through the traditional fee-for-service program.

Scully described the $253-billion Medicare program as “a disaster” in which neither patients nor the government’s insurance contractors have any incentive to control costs. He is concerned that a prescription drug benefit administered by Medicare -- rather than private pharmacy benefit managers -- would have the same political weaknesses.

“Do you want the government making political decisions about which drugs to cover and how much to pay for them?” he asked. The best way, he said, would be to have pharmacy benefit companies make decisions based on drugs’ prices and effectiveness, just as they do for private insurers.

Both officials said Bush was committed to the benefit, noting that the roughly $400 billion he has proposed for drug coverage over 10 years is double the size of his proposal last year.

As for managed care, Thompson said the administration would revamp Medicare HMOs and require more than one network to treat Medicare patients in every region of the country.

“There will be at least three, four, five, six choices for every senior to make,” he said.