President Bush Outlines Plan to Add Drug Coverage to Medicare

In a speech to the American Medical Association, the president argued that introducing free-market competition to the Medicare system would give seniors more choices and better treatment.

“Compared to people with private health plans, Medicare patients have limited choices,” he said. “Medicare will pay a doctor to perform a heart bypass operation but will not pay for drugs that could prevent the need for surgery.”

“Seniors should not have to wait for an act of Congress to get effective, modern health care,” Mr. Bush said.

The president’s plan would offer three options to seniors.

Those who remain in traditional Medicare, in which the government reimburses a doctor of the patient’s choice but does not currently offer drug coverage, will be offered coverage for high out-of-pocket drug costs and a drug discount card. Low-income participants would also receive an annual $600 drug subsidy. The White House would not specify at what point coverage for high drug costs would kick in, saying the details of the Bush plan would be worked out with Congress.

The second option in the president’s proposal is “enhanced Medicare,” which would provide seniors with comprehensive drug coverage, full coverage of preventive care and caps on out-of-pocket costs for hospitalization.

Participants in “enhanced Medicare” could choose from a list of subsidized private-sector plans, including preferred provider plans with a network of approved doctors and others that would be more expensive for users but allow a wide choice of doctors and traditional “fee-for-service” style reimbursement.

Mr. Bush also outlined a third option, “Medicare Advantage,” that would enroll seniors in “low-cost and high-coverage managed care plans” currently available through the so-called Medicare+Choice program. Health plans providing coverage through this option would bid to provide participants with Medicare’s enhanced basic benefit package.

The president said he hopes that having more seniors join private health plans would drive down costs and increase choices by subjecting the Medicare program to market forces.

“The element of choice is essential. When a bureaucracy is in charge of granting benefits, new benefits usually come slowly and grudgingly, if at all. When insurance providers compete for a patient’s business, they offer new treatments and services quickly. If they don’t, the patient, the customer, will look for better services elsewhere,” the president said.

Democratic Sen. Edward Kennedy of Massachusetts pledged to fight Mr. Bush’s plan if it reaches the Senate.

“The president’s proposal is a radical prescription for dismantling Medicare that will be rejected by senior citizens and should be rejected by the Congress,” Kennedy said in a statement.

“It denies senior citizens the comprehensive Medicare prescription drug benefits they need unless they join an HMO or other private insurance plan,” he added. “It is a program that will provide billions in new profits for the insurance industry at the expense of elderly patients.”

Senate Democratic leader Tom Daschle of South Dakota said Monday he would seek to revive a 10-year, $600 billion Medicare overhaul that failed to pass the Senate last year. That plan would offer drug coverage to any Medicare participant in return for a $25 monthly premium.

“Let’s just hope that there is a way to bridge our differences,” Daschle said in a telephone news conference. “But if obviously they just refuse to do anything but to say it’s only this or nothing, it’ll probably be nothing.”

To provide some immediate help to seniors struggling with high drug costs, the president plans to ask Congress to provide all seniors with a drug discount card that the White House estimated would save 10 percent to 25 percent on prescription drugs. The General Accounting Office, the investigative arm of Congress, estimated the savings at slightly less than that.

The administration tried to implement the drug card program administratively, but community pharmacists and chain drug stores challenged the proposal, and a federal judge ruled in January that the government had no legal right to impose such a program. Several GOP lawmakers have said they support passing a law to implement the drug card program.

The president is also requesting a $600 annual subsidy for low-income seniors that would continue under his vision of a revamped Medicare.

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