Bipartisan Skepticism on Medicare Plan

Lawmakers voiced concerns Friday during the first hearing on a bipartisan Senate plan to provide 40 million Medicare beneficiaries with prescription drug coverage, highlighting a divide over the proposal’s perceived costs and benefits.

The compromise by Finance Committee Chairman Charles E. Grassley (R-Iowa) and the panel’s ranking Democrat, Max Baucus of Montana, would offer equal prescription drug benefits to seniors and the disabled, whether they stayed in traditional Medicare or chose a private health plan.

That differs from President Bush’s preference for using drug coverage as an incentive for seniors to join managed-care plans.

Testifying at the panel’s hearing, Thomas A. Scully, administrator for the Centers for Medicare and Medicaid Services, said Bush believes the agreement is a “step in the right direction.”

But several Democrats complained that they are being rushed to vote on the plan to meet a July 4 goal set by Majority Leader Bill Frist (R-Tenn.), and Republicans expressed concern with the cost of the $400-billion proposal.

Politicians from both parties used the hearing to praise the bipartisan spirit of the plan, and subsequently ripped into what they saw as its weaknesses.

Senate Minority Leader Tom Daschle (D-S.D.) said gaps in coverage under the plan would create “a tremendous amount of anxiety” among beneficiaries about premiums, services and benefits “at a time when seniors feel vulnerable.” However, he did not threaten to block the bill.

Sen. Kent Conrad (D-N.D.) said the proposal was short on details, and that Scully’s testimony lacked substance.

“I am on this Finance Committee; I am the ranking member on the Budget Committee, and I know nothing about this plan,” Conrad said. “People really don’t know what we’re doing ... and the most basic kind of questions are not being answered.”

Conrad was scornful of Scully’s answers after the Medicare administrator said his understanding of the Grassley-Baucus plan was based on a “two-page summary” and several staff briefings.

Sen. Craig Thomas (R-Wyo.) defended the compromise, saying lawmakers endured many long meetings to strike a deal that could be accepted by Republicans and Democrats.

But Sen. Don Nickles (R-Okla.) said he worried that the government would underestimate the new program’s cost and its “enormous, brand new subsidies” to health-care companies.

Several senators of both parties emphasized the need to ensure coverage in rural areas.

Sen. Jeff Bingaman (D-N.M.) said managed-care plans seeking to serve Medicare patients should be required to commit to stay in rural areas for at least three years. The Grassley-Baucus plan would require only a one-year commitment.

Coverage in rural areas is a priority for the Finance Committee, since senators from six of the nation’s 10 least densely populated states serve on the panel.

To protect rural areas, the agreement would change Medicare rules that allow private health plans to pick particular counties to serve.

Instead, the proposal divides the nation into 10 regions to assure that rural areas will not be bypassed by managed-care plans. If at least two plans are not available in a region, the government must intervene to ensure patients’ access to coverage.

The Grassley-Baucus proposal would need 60 Senate votes to avoid a filibuster.

Last year, the Senate failed in four attempts to modernize the 38-year-old Medicare program.

Sen. John D. “Jay” Rockefeller IV (D-W.Va.), who has long been involved in Medicare legislation, said there were still too many unresolved questions about the proposal.

“I’ve never been through a process as bad as this,” he said. “It’s the most extraordinarily bad way of doing business that I can think of.”