Posted on 01/02/2003 10:14:58 PM PST by JohnHuang2
ASHINGTON, Jan. 2 ? With the new Senate majority leader as a powerful ally, President Bush will propose sweeping, long-term changes in Medicare later this month when he urges Congress to provide prescription drug benefits for the elderly, administration officials say.
In the last three weeks, the president has told his advisers and Congressional leaders that he wants to promote competition in Medicare to shore up the program for 76 million baby boomers and to establish his credentials on an issue likely to figure prominently in the 2004 election.
Administration officials said Mr. Bush's vision for Medicare closely resembled proposals advanced in the last three years by Senator Bill Frist, the Tennessee Republican who is to become majority leader when Congress convenes on Tuesday. While Mr. Bush had been drafting his own proposals, administration officials and Congressional aides said Dr. Frist's elevation enhanced the prospect that they would be taken seriously on Capitol Hill.
Though White House officials are still working out details, Mr. Bush, like Dr. Frist, has said he wants to foster competition between the original fee-for-service Medicare program and private health plans. Such changes could eventually make Medicare look more like private insurance. Because of his long interest in the issue, Dr. Frist can explain and defend the Medicare proposals in a way that the previous Senate Republican leader, Trent Lott of Mississippi, never could.
Still, persuading Congress to enact major changes in the structure of Medicare, beyond the addition of drug benefits, will be an uphill struggle for Mr. Bush, even with help from Dr. Frist, because the program is immensely popular with older voters.
Administration officials hope that the changes would, over the long term, produce savings by keeping costs down. But they had no firm estimates for now.
Under one idea favored by many of the president's advisers, the government would give Medicare beneficiaries a powerful incentive to enroll in more efficient, less costly health plans. If private health plans did a better job of holding down costs, their members would reap the benefits, getting cash rebates or lower premiums. Conversely, if the traditional program cost less, the government would pass on most of the savings to people who are in it.
Under another proposal, Medicare would offer enhanced benefits, including a cap on out-of-pocket costs, perhaps in return for higher premiums.
"The president has encouraged his advisers to think long term," a White House official said today. "He insists that any proposal for prescription drug benefits must have major Medicare reforms in it. We shouldn't just add liabilities onto a program that's antiquated and likely to go bankrupt."
An administration official said Mr. Bush agreed with Dr. Frist's view that "drug coverage must be part of comprehensive Medicare reform."
That view complicates the task facing Congress and virtually ensures a huge political battle. Almost every member of Congress has promised drug benefits to the elderly, and the two parties could conceivably strike a compromise on that issue, but they are nowhere near agreement on long-term changes in the structure of Medicare.
"If the price of a prescription drug benefit is the end of Medicare as we know it, that's not a price worth paying," said Debbie Curtis, chief of staff to Representative Pete Stark, Democrat of California.
The White House is working with an influential Democratic senator, John B. Breaux of Louisiana.
"Just adding prescription drugs to an outdated Medicare program is like throwing lead weights onto a sinking ship," said Mr. Breaux, who has drafted legislation with Dr. Frist to inject market forces into Medicare.
In June, the House passed a Republican bill to offer drug benefits to all 40 million elderly and disabled people on Medicare. It included a little-noticed provision for an experiment under which the fee-for-service Medicare program would compete with private insurance plans, including health maintenance organizations, in four metropolitan areas.
Administration officials said this was just the type of competition they wanted to encourage, because it would make Medicare beneficiaries more conscious of costs. But, the officials said, House Republicans were too timid in limiting their experiment to four areas and should have tried it on a larger scale.
Congressional Republicans welcomed the prospect that Mr. Bush would lead a high-profile campaign for prescription drug benefits, but they said they were apprehensive about White House ideas for fundamental changes in the Medicare structure. Elderly voters want drug benefits as soon as possible, but are not clamoring for "Medicare reform," said several Republicans who personally favor such changes.
Mr. Bush and Dr. Frist often cite the Federal Employees Health Benefits Program as a model for the competition they want to see in Medicare. Under that program, the government contributes a fixed amount of money for each employee, and workers who choose more expensive plans have to pay more.
Bobby Jindal, an assistant secretary of health and human services, endorsed that approach. "Plans should be allowed to bid to provide Medicare's required benefits at a competitive price," Mr. Jindal said, "and beneficiaries who elect a less costly option should be able to keep most of the savings."
But Vicki Gottlich, who counsels elderly patients as a lawyer at the Center for Medicare Advocacy, said that approach would not work as well for Medicare beneficiaries as for federal employees. "It could shift costs to individual beneficiaries so that people with the greatest medical needs pay the most for their health care," Ms. Gottlich said.
About 85 percent of Medicare beneficiaries are in the fee-for-service program. Many private health plans have dropped out, saying Medicare pays too little to cover their costs. Administration officials said Mr. Bush would propose an increase in Medicare payments to private plans, as an incentive for them to stay in the program.
The comptroller general of the United States, David M. Walker, has said that Medicare is "unsustainable in its present form," because the costs are growing much faster than either the economy or the revenues available to pay for the program. The Congressional Budget Office says that the annual cost, $256 billion last year, will top $470 billion in a decade, without any new benefits.
In outlining his health-care agenda, President Bush said last year that "seniors who are happy with the current system should be able to keep the coverage that they have now, with no changes, if they prefer."
Administration officials said this commitment applied to people already in Medicare, and perhaps to those who become eligible in the next 5 to 10 years. Whether it applies to people who enter Medicare after that is "open to discussion," an administration official said.
Under several proposals being considered by the administration, Medicare beneficiaries would be encouraged to enroll in an H.M.O. or in a new version of the fee-for-service program to obtain prescription drug benefits.
The new option would offer more extensive coverage of preventive services, like mammograms and colon cancer tests, and would provide greater protection against the high costs of serious illnesses. But for such protection, officials said, Medicare beneficiaries might be required to pay higher premiums and co-payments, in addition to any new charge for drug coverage.
Under the existing program, Dr. Frist has noted, Medicare covers only half of the health costs for an average beneficiary, leaving the elderly exposed to "large and unlimited out-of-pocket liabilities."
The Medicare premium, now $58.70 a month, rises with Medicare spending for doctors' services and outpatient hospital care. Even without new drug benefits, the premium will reach $105 in 2012, the Congressional Budget Office estimates. Under the bills most seriously considered by Congress last year, Medicare would charge an additional premium for drug coverage, starting at $25 to $33 a month.
As members of a federal advisory commission in 1998 and 1999, Senators Frist and Breaux devised an elaborate proposal to promote competition in the Medicare market.
Within hours after Congress convenes next week, health care providers will converge on the Capitol to lobby for higher Medicare payments.
Administration officials said Mr. Bush would support a small increase in Medicare payments to doctors, whose Medicare fees were cut 5.4 percent last year and 4.4 percent this year.
If we're going to change it, however, - let's do it right.
Carolyn
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