Medicare Reform Now Hits the Bumpy Road

Seniors should not count on getting Medicare prescription drug coverage just yet.

Medicare overhaul legislation squeaked through the House by a single vote early Friday. Just an hour earlier, the margin in the Senate was much larger, but the support of many Democrats was contingent on hard-won provisions not found in the House bill.

So the conference committee that will have to write a compromise version of Medicare reform legislation will face a delicate -- and perhaps impossible -- task as it seeks a formula that can command a majority in both chambers.

Republican leaders acknowledged as much Friday, doing their best to lower any expectations that Congress would follow its two-week sprint to House and Senate passage by quickly bridging deep differences over the roles of the government and private insurance companies in delivering health care to American seniors.

GOP leaders who once talked of getting a prescription drug bill to President Bush’s desk by August suggested that negotiations could continue into the fall.

“If we don’t do the policy right,” said Senate Majority Leader Bill Frist of Tennessee, “it will come back and haunt us. We’re in no hurry.”

“To hurry this process ... is not of the essence here,” echoed House Speaker J. Dennis Hastert of Illinois. “We need to take our time and get the policy right.”

Bush, meanwhile, urged Congress to forge ahead, saying that “a stronger Medicare system that gives our seniors more choices and better benefits has been an essential priority of my administration.”

Bush phoned several GOP House members Thursday night to ask them to support the bill. White House spokesman Ari Fleischer said Friday the president would continue to lobby hard for final passage.

“Nothing is set in stone,” Fleischer told reporters on Air Force One en route to California. “No one should take this for granted.”

Back in the capital, sleep-deprived lawmakers of both parties -- hardly giddy despite their late-night victories -- offered the same assessment of the Medicare reform process: Now comes the hard part.

“This is a new program,” Senate Finance Chairman Charles E. Grassley (R-Iowa) said of the coming bargaining sessions between House and Senate conference committee members.

Committee members, who have not been named, will try to split the difference on any number of important issues.

Some of the differences have to do with the details of the drug benefit itself.

Most Democratic lawmakers want to close the coverage gap that would leave seniors paying all of their medication expenses above a certain amount until catastrophic coverage kicked in. Some Republicans, meanwhile, want to limit drug coverage to low-income seniors or to reduce the benefits available to wealthier ones.

That would be a big departure from Medicare’s tradition of providing the same benefit to all regardless of income. Democrats vehemently oppose any departure from that tradition. They fear tailoring the program to the poor would undercut the support from the middle and upper classes, which has made the program politically impregnable.

This issue provoked a near-meltdown in the Senate late Thursday night. The crisis was averted after senators agreed to drop an amendment offered by Sens. Dianne Feinstein (D-Calif.) and Don Nickles (R-Okla.) that would have required well-off Medicare beneficiaries to pay higher premiums for their prescription drug coverage.

Frist said Friday that a majority of senators would have approved the amendment. He predicted that some form of income test would be included in the final bill.

The biggest and most difficult disagreements have to do with a broader question about Medicare reform: How far should Congress go in allowing private health plans and market competition to participate in a program that for two generations has been heavily government regulated?

Going to the core of this question is the Senate provision allowing the federal government to provide “fallback” drug coverage in areas without at least two private sources of prescription drug coverage.

Democrats say that is essential to ensuring access to drug benefits, since there are big questions about whether private insurers will offer such policies. Republicans say the availability of the federal fallback option will undercut private companies’ willingness to enter the market.

The administration opposes the Senate provision. But Sen. Max Baucus of Montana, the ranking Democrat on the Finance Committee, said a bill that did not allow the federal government to provide fallback coverage would be in jeopardy of losing Democratic support.

“That would be a real problem -- big time,” Baucus said. “I probably would not support the bill” if it did not include the federal fallback, he added.

In the House, Republicans are divided over whether Medicare should even cover prescription drugs.

“Conservatives are concerned this is a government entitlement that will get out of hand,” Hastert said.

On top of these and many other substantive differences, conferees will also confront differences of style between the two chambers.

Frist and other Republican leaders in the Senate worked hard with leading Democrats to design a bill lawmakers of both parties could support. The House debate, in contrast, was dominated by conservative Republicans and liberal Democrats who saw no room for compromise.

Asked Friday if his commitment to bipartisanship would survive the partisan fervor of House conferees, a tight-lipped Frist replied, “We’ll see.”

Hastert was equally circumspect about the prospects for a final bill.

“We take one vote at a time,” he said.

At least in the Senate, where 11 Democrats and 10 Republicans voted against the bill, there is some wiggle room.

Both of California’s senators, Democrats Barbara Boxer and Feinstein, voted for the Senate bill. The state’s House delegation split along party lines, with all 33 Democrats voting against the House bill and all 20 Republicans supporting it.

The best Hastert could say of the 216-215 vote in his chamber was, “We got it done. Sometimes it’s pretty, sometimes it ain’t.”

House approval of the prescription drug bill came at about 2:30 a.m., only after a cliffhanging roll call vote that lasted an hour. Votes in the House usually last 15 minutes, but GOP leaders left the vote open to allow time to twist arms and turn a losing tally into a winning one.

What ensued was a remarkably open scene of the bare-knuckles legislative lobbying that usually happens behind closed doors.

At the official end of the time allotted for the roll call, the electronic tally board showed that the bill was about to be defeated by two votes. Hundreds of House members sat in their chairs as Ways and Means Chairman Bill Thomas (R-Bakersfield), Hastert and other GOP leaders bore down on wayward Republicans who had not voted for the bill.

They focused on a handful of Republicans who voted no because they thought the bill did not do enough to allow U.S. pharmacists to reimport cheaper drugs from Canada, an issue that has enjoyed especially strong support from lawmakers in border states.

In the end, the bill passed after Rep. Vernon J. Ehlers (R-Mich.) voted for the bill and Rep. C.L. “Butch” Otter (R-Idaho) switched his vote to yes.

Hastert said Friday the crucial votes were switched after GOP leaders agreed to have the House vote on a separate drug reimportation bill, which he acknowledged does not now exist.

The climactic moment came when a visibly distressed Rep. Jo Ann Emerson (R-Mo.) came down the center aisle of the House to change her vote. After she was hugged by a couple of Democrats, she threw up her hands as if to say, “What could I do?”

*

(BEGIN TEXT OF INFOBOX)

Comparing the bills

The House and Senate have each adopted plans to help Medicare recipients pay for prescription drugs. Differences will need to be worked out before the changes can become law. Here’s how the plans compare:

*

Drug benefit: Effective date

Senate Bill: 2006

House Bill: 2006

*

Drug benefit: Premiums

Senate Bill: $35 a month (average)

House Bill: $35 a month (average)

*

Drug benefit: Deductible

Senate Bill: Beneficiary pays first $275 of drug costs annually

House Bill: Beneficiary pays first $250 of drug costs annually

*

Drug benefit: Initial coverage

Senate Bill: Insurance pays 50% of drug costs costs from $276 to $4,500

House Bill: Insurance pays 80% of drug costs from $251 to $2,000

*

Drug benefit: Coverage gap

Senate Bill: Beneficiary pays all drug costs from $4,501 to $5,812.50

House Bill: Beneficiary pays all drug costs from $2,001 to $4,900

*

Drug benefit: Catastrophic

Senate Bill: Insurance pays 90% of additional costs

House Bill: Insurance pays all additional costs

*

Drug benefit: High-income beneficiaries

Senate Bill: No provision

House Bill: Individuals making more than $60,000 and couples over $120,000 must pay more out of pocket before catastrophic coverage kicks in

*

Drug benefit: Fallback

Senate Bill: A government-run drug plan is made available in locations without at least two private plans

House Bill: No provision

*

Other provisions

*

Drug benefit: Role of private sector

Senate Bill: Uses private firms to administer drug benefit and allow private preferred-provider organizations to deliver basic health care

House Bill: Same

*

Drug benefit: Rural health

Senate Bill: Provides about $25 billion to increase Medicare payments to rural hospitals and doctors starting mostly in 2005

House Bill: Provides about $28 billion, starting mostly in 2004

*

Drug benefit: Generic drugs

Senate Bill: Prevents big drug companies from blocking cheaper generic equivalents to their brand-name drugs

House Bill: Same

*

Drug benefit: Drug imports

Senate Bill: Facilitates importing of cheaper drugs from Canada

House Bill: Same

*

Drug benefit: Hospital payments

Senate Bill: No provision

House Bill: Cuts the rate of growth of Medicare payments to hospitals

*

Sources: Senate Finance Committee; House Ways and Means Committee; Congressional Quarterly; Associated Press