Medicare Prescription Bill Wins Endorsement of AARP

Creating a formidable political force, the nation’s leading seniors association Monday endorsed a Republican plan to add a prescription drug benefit to Medicare, lining up with top industry groups representing doctors, hospitals and other health-care providers in support of the legislation.

With the 35-million-member AARP and powerful industry lobbies backing the legislation, the senior Democrats and the small circle of conservatives who oppose the Medicare plan now have only a shallow pool of allies to help them block the measure.

They also have only days to make their case against the bill, which would bring the biggest changes to Medicare since it was founded 38 years ago. Republican leaders say a vote could come within the next week.

“It’s not obvious now where the big blocs of opposition will come from, given that all these large groups have already come on board,” said Gail Wilensky, who ran the Medicare system under the first President Bush. She said the Republican authors of the bill, who spent more than four months negotiating the details, “recognized that there were a lot of interests to bring on board. I think they did a very good job.”

The legislation would create a prescription drug benefit starting in 2006. Most seniors would pay an average monthly premium of $35 and a deductible of $275 a year.

For most, Medicare would pick up 75% of prescription expenses between $275 and $2,200 a year. Expenses beyond $2,200 would not be covered by Medicare until a senior spent $3,600, after which Medicare would cover 95% of the costs.

The bill also provides tens of billions of dollars in increased government reimbursements for hospitals, doctors and rural health-care providers. And it would allow private health plans to compete for the right to serve the system’s 40 million elderly and disabled beneficiaries.

The AARP endorsement is a prize for Republican leaders, who can use it to answer Democratic arguments that the changes are a bad deal for seniors and would undermine the government-run health insurance program. Underscoring its importance, President Bush met Monday with the AARP’s chief executive, Bill Novelli.

The seniors group -- formerly known as the American Assn. of Retired Persons -- said it would start a multimillion-dollar advertising campaign Wednesday to back the legislation.

“Though far from perfect, the bill represents an historic breakthrough and important milestone in the nation’s commitment to strengthen and expand health security for its citizens,” the group said in a statement.

The endorsement forced Democratic opponents of the bill to argue that they know better than the leading seniors group how to advocate for seniors.

The AARP has “sold out” its membership and sacrificed “the long-term security of Medicare for the sake of a short-term, and very limited, prescription drug benefit,” said Rep. John D. Dingell (D-Mich.). Senate Minority Leader Tom Daschle (D-S.D.) said that “when seniors see the details of the Republican plan, the AARP leadership will undoubtedly regret this ill-advised decision.”

Sen. Edward M. Kennedy (D-Mass.), the leader of congressional opposition to the bill, huddled Monday with senior and consumer groups other than the AARP, as well as with labor unions. But one Democratic congressional aide conceded that Democrats would not be able to defeat the plan short of a filibuster in the Senate, a move that would carry its own political risks because it could make Democrats look like obstructionists.

Republican leaders unveiled the broad outlines of the package over the weekend, but lawmakers have not seen detailed language. Two Democratic senators helped broker the deal: Max Baucus of Montana and John B. Breaux of Louisiana.

Among Democrats, opposition has focused on the drug benefit, which some say is too meager, and on a provision that would allow private health insurers to compete with the government-run Medicare program.

Many Democrats say competition would undermine Medicare by subsidizing an exodus of the healthiest seniors into private plans, leaving the government with the sickest and most expensive beneficiaries. But conservatives favor competition, saying it would reduce the costs to taxpayers.

Some conservatives say the final proposal is too weak because it does not allow competition to begin until 2010 under a six-year pilot program and covers limited regions of the country.

“This bill is a Christmas tree, with all kinds of benefits to all kinds of groups,” said Stuart Butler, a health policy specialist at the Heritage Foundation. He called it “a terrible package,” in part because “there is nothing to control costs.”

Hospitals estimate that they would get $20 billion in additional payments over 10 years. Physicians would get a 1.5% increase in reimbursements to serve Medicare patients, instead of payment cuts that would have totaled almost $3 billion next year.

And insurers would get $12 billion to help them enter the market as part of the competition plan.

The increases in government reimbursement are so good, industry officials say, they’ve been inspired to help drum up votes for the bill.

“We are advertising. We are activating our grass roots. We are providing district-specific breakdowns of the hospital impact to lawmakers -- anything and everything we can think of,” said Kristen Morris, vice president for legislative affairs at the American Hospital Assn.

The American Medical Assn. is buying advertisements in Washington newspapers to support the legislation.

Dr. Donald J. Palmisano, president of the AMA, said the group had been “deeply concerned” that Medicare payments to doctors did not cover the cost of serving patients but that the legislation “dramatically” reduces those worries.

A major health insurance trade group, the AAHP-HIAA, said it had spent $1.5 million on television and radio advertising as part of a coalition called the Alliance to Improve Medicare.