JIM LEHRER: Now, Congress approves big changes in Medicare. Kwame Holman reports.
SPOKESMAN: On this vote, 76...
KWAME HOLMAN: The historic votes both came after 1:00 this morning, first the Senate, then the House. A few hours later, President Bush congratulated Congress for pushing through the most sweeping expansion and overhaul of the Medicare system in its 38-year history.
PRESIDENT GEORGE W. BUSH: I'm also pleased by the votes last night in the United States Senate and the United States House of Representatives to improve Medicare and to extend prescription drug coverage to our seniors -- a stronger Medicare system that gives our seniors more choices and better benefits has been a central priority of my administration.
KWAME HOLMAN: Congressional Republican leaders who moved the two bills celebrated.
SEN. BILL FRIST: Tonight we are one step closer to providing real health care security to seniors all across the nation.
KWAME HOLMAN: Many Democrats, however, were not nearly as pleased.
REP. CHARLES RANGEL: This is the first step that has been specifically designed not to reform the Medicare system as we know it, but to dissolve it.
KWAME HOLMAN: The House and Senate bills both would provide $400 billion over 10 years to fund prescription drug coverage and other benefits to 41 million retirees in the Medicare system. Seniors would pay annual deductibles of $250 under the House bill; $275 in the Senate version. Both plans estimate monthly premiums at $35. The House bill covers 80 percent of annual drug costs up to $2,000; the Senate, 50 percent of the costs up to $4,500. Coverage would stop for drug costs between $2,000 and $4,900 in the House bill, and between $4,500 and $5,800 in the Senate bill. Coverage would resume for so- called catastrophic costs, paying 100 percent of drug costs above $4,900 in the House bill, and 90 percent of costs above $5,800 in the Senate bill. But both bills also contain a controversial option that would allow seniors to buy drugs through new private insurance plans beginning in 2006. The Senate's private insurance provision had bipartisan support and the bill passed easily. But the House bill relies much more heavily on private insurance plans that would compete directly with traditional Medicare. Democrats opposed it vehemently. And the bill barely squeaked by because 19 Republicans also voted no. Indiana's Mike Pence spoke for fiscal conservatives who fear adding prescription drug coverage to the Medicare program will explode its costs.
REP. MIKE PENCE: This would be the biggest new federal entitlement since 1965 when Medicare was created. Medicare currently costs seven-and-a-half times what this Congress said it would cost when they invented it. Let us not in this Congress today sow the seeds to destroy the foundation of a free-market system by creating a universal drug benefit in Medicare.
KWAME HOLMAN: Meanwhile, Democrats hammered away that the private insurance provision is a veiled attempt to destroy traditional Medicare.
REP. RICHARD NEAL: Tonight, let us stand with history, stand with Roosevelt and stand with Lyndon Johnson on what Medicare has done to make us a much more equitable society. What a great achievement it is. Reject the notion tonight of where they are going to take us, and that is down the road to privatization of Medicare.
KWAME HOLMAN: That drew this from Budget Committee Chairman Jim Nussle:
REP. JIM NUSSLE: Well, that is great, but it is not 1965. Medicare is going bankrupt. Tax cuts didn't cause that. Health care costs are out of control. The reimbursement system under Medicare is broken and it is not paying the bills. Hospitals are closing. Doctors are leaving rural areas or not taking Medicare patients at all. And the Democrats have done nothing about it for the past 30 years since they did pass Medicare in 1965.
REP. ANNA ESHOO: How dare my colleagues on this side of the aisle say that the Democrats haven't done a damn thing. I regret those words in the record.
KWAME HOLMAN: In fact, Democrats tried to offer a plan similar to the Senate Medicare bill, but weren't allowed by the Republican majority. So Massachusetts' Ed Markey aimed his ridicule at the Republican bill.
REP. ED MARKEY: Watch out, grandma. Watch out, grandpa. The GOP is selling snake oil off the back of a wagon, and, boy, do they have a prescription for you, further weakening the foundation of Medicare for the seniors who need it most. This is a black day for Medicare. You know, GOP used to stand for Grand Old Party. Now it stands for get old people.
KWAME HOLMAN: Louisiana's Billy Tauzin, who helped write the Republican Medicare plan, responded.
REP. BILLY TAUZIN: I'm offended that anyone would come to this floor and accuse anyone in this House of wanting to get old people. Do you think for a second you love your moms and dads any more than we love ours? That's the sort of un-statesmanship that should never enter the halls of this House. There's no one in this House loves their mother more than I love my mother. I challenge you on that, sir. She's a three-time cancer survivor. She's 84 years old and God bless her, she won first place at the senior Olympics this year in shot put. If you give her trouble, I'll sic her on you.
KWAME HOLMAN: All day, Republican leaders said the vote would be close. After some reported arm- twisting Republicans prevailed by one vote. On the other side of the Capitol, the tone was decidedly quieter. But in the Senate too, fiscal conservatives warned against a Medicare bill that offered a new prescription drug entitlement but little cost-saving reform. New Hampshire's Judd Gregg:
SEN. JUDD GREGG: And if this bill were to pass in its present form or anything near to its present form, it would fundamentally extinguish the torch which the Republican party has allegedly, and I thought pretty effectively, carried for years, which was the torch of spending responsibility. That's why I came here, as I said when I began my statement, I came here to try to do something about controlling the rate of growth of spending in the federal government, especially in the area of entitlements.
KWAME HOLMAN: For their part, liberal Democrats, such as North Dakota's Byron Dorgan, lamented that seniors still would have to pay too much out of their own pockets for drugs and further privatization of Medicare would only make things worse for them.
SEN. BYRON DORGAN: Because some people don't like the Medicare program they say, "well, let's do this in the private sector." The private sector is the sector that wouldn't insure old people in the first place, by the way, which is the reason we had to have a Medicare program developed by the Congress.
KWAME HOLMAN: Smoother sailing for the Senate bill was made possible earlier this week by a compromise amendment on the issue of private health plans. Senators agreed to split $12 billion, half to bolster private health plans-- so-called Preferred Provider Organizations-- and half to improve chronic care for seniors using traditional government-run Medicare. Democrat John Breaux:
SEN. JOHN BREAUX: If one side had their way they would do it all with preferred providers. If our side perhaps had their will, it would provide all the money to be put back into traditional Medicare, but we all know that in a divided Senate that's not possible. This is a good amendment, it's an important amendment. We are on the edge of an historic day and being able to enact real Medicare reform with prescription drugs for all of our nation's seniors. We cannot let that goal be lost while we fight over how to divide extra funds. I think this division is as fair as it can possibly be and I would urge all of our members to be able to vote for it.
KWAME HOLMAN: Because the House and Senate bills contain major differences on the issue of private health plans, work to meld them into final prescription drug legislation could extend into the fall.