Bush to Unveil Plan to ‘Modernize’ Medicare

CRAWFORD, Texas -- President Bush will soon propose major changes in Medicare, including a first-ever prescription drugs benefit, more patient choices in health plans and greater emphasis on preventive medicine, administration and White House officials said Friday.

“We’re talking about fundamental reform -- not just hanging a new benefit on Medicare or simply increasing reimburse rates for doctors, hospitals and health plans,” a senior official said. “We’re looking at the modernization of a program.”

But the prospect of a Republican-led effort to revamp a Great Society health insurance program for senior citizens raised concern among some Democrats. They vowed to put up a fight if the 40 million Medicare beneficiaries are forced to give up other program benefits in exchange for insurance coverage for outpatient prescription drugs.

“Senior citizens have paid into Medicare all their lives and deserve a prescription drug benefit -- no strings attached,” said Sen. Edward M. Kennedy (D-Mass.), a prominent congressional voice on health-care issues.

With a wave of baby boomers about to reach retirement age, Medicare faces potentially devastating financial costs. Yet previous attempts to reform the program have been derailed by an array of interest groups with competing stakes in the matter, from doctors to the AARP, which represents the nation’s seniors.

But White House spokeswoman Claire Buchan said Friday that Bush is determined to make good on a commitment he first articulated during his campaign for president more than two years ago and repeated last summer. “The president is very much looking forward to working with Congress to modernize Medicare when Congress gets back,” she said.

Bush’s intention to propose sweeping and long-term Medicare changes this month was first reported in Friday’s New York Times. Officials confirmed the report, although they said Bush has never wavered from undertaking such an effort.

Indeed, the very act of proposing such a plan would lend Bush bona fides on an issue that may figure prominently in the 2004 presidential campaign. However, it might also provide Democrats with timely political ammunition just as the campaign gets underway.

No public-policy initiative generates greater controversy than proposals to change Medicare or Social Security. Attempts to revamp either program inevitably pits older generations against younger ones -- and forces Democrats and Republicans to confront their fundamental beliefs about the role of government in helping the vulnerable.

Add to that the financial stakes involved -- health care accounts for one-seventh of the American economy -- and the result is a recipe for gridlock.

But as John Rother, AARP’s chief policy analyst, noted, Republicans are under pressure to produce a plan to modernize Medicare because they now control not only the White House, but both houses of Congress.

But no significant reforms will result unless both parties compromise, he said. “It has to be bipartisan.”

Details of Bush’s plan are still being finalized, but senior administration officials said that the overarching goal will be to make each Medicare dollar go further, in part by redesigning the program to more resemble the private insurance market.

This would be accomplished, they said, through incentives to encourage seniors to enroll in less-costly health plans, such as health maintenance organizations.

At the same time, officials said, the president intends to increase Medicare payments to providers, who increasingly are opting out because of insufficient reimbursements.

One model favored by Bush and his health advisors -- including incoming Senate Majority Leader Bill Frist, a key Bush ally -- is the Federal Employees Health Benefits Program, which offers a large menu of insurance plans.

Under the program, the federal government contributes a set premium for each employee. Workers who select more expensive -- and expansive -- plans must pay the additional costs out of their own pockets.

“Choice is a good thing in and of itself,” one administration official said. “But choice also drives competition. And competition generally leads to better prices.”

Another key feature under consideration by the White House is broader coverage for preventive care.

Such services as regular mammograms and other disease-screening tests not only improve health status but also cut medical costs in the long run.

It remained unclear Friday how much detail Bush’s proposal will contain. On some other key issues, the White House has merely sent to Congress the president’s principles, leaving lawmakers to work out the details.

But even the outline offered by administration officials set off alarms in some quarters.

At the AARP, Rother said that although Medicare reform -- including coverage for prescription drugs -- is clearly needed, such changes must not force seniors to abandon their existing arrangements.

On Capitol Hill, Kennedy said the direction in which the White House is heading may raise Medicare premiums and financially penalize those who chose not to enroll in HMOs and other private insurance plans.

Kennedy, who teamed up with Bush to enact an education overhaul in 2001, left little doubt that he would resist Bush’s proposal to revamp Medicare.

“Partisan, controversial, and potentially destructive changes in Medicare should not be the price senior citizens have to pay for the affordable prescription drugs they deserve,” Kennedy said.