Bush Renews Call for Quick Agreement on Senate, House Medicare Reform Bills
During three "speedy, campaign-like stops" in Florida yesterday, President Bush reiterated his call for Congress to quickly reconcile the Senate and House Medicare reform proposals and send him a final bill, the New York Times reports. Both measures would offer beneficiaries a drug benefit and increase the participation of private plans in Medicare, but they differ in their approaches. Speaking to mostly Hispanic seniors during one stop at the Miami-based Little Havana Activities and Nutrition Center, Bush said that it is "essential" to add a prescription drug benefit to Medicare but did not say whether he prefers the House or Senate proposal, according to the Times. He said, "The Senate had one version, the House of Representatives had another, but there's a lot of commonality between them. And I'm confident that [lawmakers], when they get back from their Fourth of July breaks, will get to work, iron out the differences in a constructive way and get a good bill to my desk, so that I can then say, and all of us can say, 'We've done our jobs on behalf of America's seniors'" (Bumiller, New York Times, 7/1). Bush also addressed Medicare reform at fund-raising stops at the Miami Airport Hilton and in Tampa. The Washington Post reports that Bush discussed the details of a potential Medicare drug benefit "at such length ... that many of his listeners appeared to lose interest" (Milbank, Washington Post, 7/1).
According to the AP/Las Vegas Sun, the speeches are part of the Republican party's effort to "take credit" for a Medicare prescription drug benefit and "woo elderly voters" in the 2004 presidential election (Riechmann, AP/Las Vegas Sun, 7/1). HHS Secretary Tommy Thompson, who accompanied Bush to the fund-raisers, said while introducing Bush, "This man is a hero for seniors, a hero for the medical system, a hero for all Americans." Thompson added that Congress, after years of attempting to pass a prescription drug benefit for Medicare, "needed just one thing to get it done, and that was the leadership of our great president." The Post reports that Bush is not officially campaigning. He said, "There will be plenty of time for politics. Right now I'm focused on the people's business in Washington, D.C." (Washington Post, 7/1).
Bush administration officials yesterday declined to set a deadline for the House and Senate to reconcile their reform proposals in conference committee, CongressDaily reports. White House press secretary Ari Fleischer, when asked yesterday whether Bush wanted the legislation completed by Aug. 1, when Congress begins a month-long recess, said that the administration wants "as much progress as quickly as possible." The administration's refusal to set a firm deadline mirrors recent statements by Senate Majority Leader Bill Frist (R-Tenn.) and House Speaker Dennis Hastert (R-Ill.) (CongressDaily, 6/30).
Private health insurance companies yesterday began lobbying for "major changes" to the Medicare reform proposals passed Friday by the House and Senate, the New York Times reports. Representatives of private plans said that the current proposals will not work as intended because few private plans would enter the Medicare market unless the federal government increases subsidies and guarantees more market stability. According to the Times, private plan officials also said that the proposals would need to increase payments to private plans participating in Medicare+Choice. Blue Cross and Blue Shield Association Senior Vice President Mary Nell Lehnhard, American Association of Health Plans President Karen Ignagni and Health Insurance Association of America President Dr. Donald Young yesterday expressed concern about provisions that would limit the number of private plans that could participate in Medicare. According to the Times, the legislation passed by the House and Senate would call for the government to contract with up to three preferred provider organizations in each region of the country to provide drug benefits and a full range of medical services.
"Rather than picking winners and losers, the government should let the market decide," Lehnhard said. She also expressed concern about a provision in the bills that calls for Medicare to sign two-year contracts with PPOs, saying, "To establish a network of doctors and hospitals, to compile all the data needed for a bid, to hire a sales force and to advertise a new product to Medicare beneficiaries requires a huge investment. Health plans would be hesitant to make that investment if they could be excluded from the Medicare program in two years." Ignagni added, "But if Congress does not improve payments to HMOs in 2004 and 2005, more of them will withdraw from Medicare, and that instability will undermine confidence in the private sector as an alternative to traditional Medicare. It's very difficult to build a new program around a private sector that doesn't exist." Aetna Chair Dr. John Rowe said he will urge Congress to adopt provisions that would provide assistance or protection to private insurers that attempt to add rural physicians to their networks. Young added, "Doctors and hospitals have real market power in rural areas. We need them to participate in our networks. But we can't pay them 30% more than Medicare pays them at the same time we're competing with the traditional fee-for-service Medicare program." The Times reports that some insurers are also concerned about a provision in the Senate bill that calls for the country to be divided into 10 regions, each of which would include at least one state. Deborah Bohren, senior vice president of Empire BlueCross BlueShield in New York, said, "That provision appears to preclude us from participating in the new Medicare program. Our license does not allow us to sell health insurance to individuals residing outside our service area, which covers 28 counties of eastern New York" (Pear, New York Times, 7/1).
Nearly 80% of adults in the United States favor adding a drug benefit to Medicare and 19% oppose such a move, but 67% said the proposals approved by the House and Senate would "not do enough," according to a USA Today/CNN/Gallup poll, USA Today reports. For the survey, the first national opinion survey on Medicare reform since both chambers approved proposals, researchers interviewed 1,003 adults between Friday and Sunday and found that 51% of respondents ages 65 and older said that neither proposal would affect them. Twenty percent of respondents ages 65 and older said the benefit would be an improvement over their current situation, and 18% said they thought it would make them worse off. The survey also found that 64% of respondents ages 65 and older already have drug coverage. In addition, the survey found that 56% of respondents credited Republicans and 26% credit Democrats for the recently approved legislation (Drinkard/Benedetto, USA Today, 7/1).
The House bill (HR 1), approved 216-215, would expand the participation of private health plans and give all beneficiaries a drug benefit. Beneficiaries beginning in 2006 would have access to a stand-alone drug benefit for which they would pay an estimated average $35 monthly premium and a $250 annual deductible. The plan would cover 80% of beneficiaries' drug costs from $251 to $2,000 per year, after which there would be a gap in coverage before catastrophic coverage would take effect. The amount that a beneficiary would pay before qualifying for catastrophic coverage would be determined on a sliding scale based on income. For most beneficiaries, coverage would resume once they have purchased $4,900 worth of drugs in a year, which would result in beneficiaries spending $3,500 out of pocket. Individual beneficiaries with annual incomes of $60,000 or more would have to pay more before catastrophic coverage began. The bill would raise the deductible beneficiaries pay for physician services and would include new preventive care coverage options, such as a free physical for each beneficiary. The bill also would establish direct price competition between traditional Medicare and private health plans beginning in 2010. The House bill would also provide interim assistance in the form of a drug discount card, which would be offered to Medicare beneficiaries beginning in 2004. The card could provide discounts of between 15% and 25%.
The Senate bill (S 1), approved on a 76-21 vote, also calls for increased participation by private plans in Medicare and would give all beneficiaries an equal drug benefit beginning in 2006. Beneficiaries would pay a $275 annual deductible and an estimated $35 average monthly premium for the drug coverage, which they could obtain by remaining in traditional Medicare and enrolling in a stand-alone private drug plan or by choosing a new coverage option called "Medicare Advantage." Either way, beneficiaries would pay half of their annual drug costs from $276 to $4,500 and all drug costs between $4,501 and approximately $5,800. After about $5,800, beneficiaries would be required to cover 10% of their drug costs, with Medicare paying the remainder. Under the new coverage option, private plans would offer coverage for catastrophic health expenses and preventive care services in addition to the required Medicare benefits, giving beneficiaries an incentive to move out of traditional Medicare and into a private plan. The government itself would provide a drug benefit through a contractor only in areas in which drug-only health plans decide not to participate -- a provision not included in the House bill. Like the House measure, the Senate bill would provide a drug discount card beginning in 2004 to bridge the gap before the drug benefit begins in 2006. The Senate bill also calls for spending $12 billion over 10 years for two five-year demonstration projects. One would implement a new competitive bidding payment system for private plans in certain regions, and the other would pay for preventive and chronic care services under traditional fee-for-service Medicare. Both bills would provide greater subsidies to low-income beneficiaries, though the approaches differ (California Healthline, 6/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.