President Bush To Outline Medicare Reform Framework Today
In a speech before the American Medical Association today, President Bush is expected to outline his framework for Medicare reform, under which beneficiaries would be permitted to enroll in a new private system that reportedly would offer them "more generous" drug benefits and options than traditional, fee-for-service Medicare, the Wall Street Journal reports. The drug benefit included in the framework "goes well beyond what White House officials were considering just a few weeks ago," the Journal reports (Hitt/Cummings, Wall Street Journal, 3/4). Bush's fiscal year 2004 budget proposal calls for a $6 billion "downpayment" on a 10-year, $400 billion Medicare "modernization" plan. Media reports about an earlier, unreleased Bush administration plan had said it might require Medicare beneficiaries to join some form of managed care program to receive a prescription drug benefit. Several lawmakers had criticized the anticipated plan because they said it would force Medicare beneficiaries to choose between managed care and traditional Medicare to receive a drug benefit (California Healthline, 2/28). A senior administration official said that the Bush Medicare reform proposal will "not [be] an exhaustively detailed legislative proposal because the goal here is for the administration to work with Congress" to come up with specifics, USA Today reports (Welch, USA Today, 3/4).
Bush's framework reportedly would give beneficiaries in traditional Medicare discount cards they could use at pharmacies to save 10% to 25% on prescriptions and would give low-income beneficiaries $600 per year to offset their drug costs, the Journal reports. In 2006, beneficiaries in traditional Medicare would receive catastrophic drug coverage. According to people familiar with the administration's plan, the catastrophic coverage benefit would take effect for beneficiaries who spent $5,500 to $7,000 on medications in a year; Congress would determine the eventual cap. Under a second option, Bush's framework would reportedly allow seniors to join a new private system called "Enhanced Medicare," which would begin in 2006 and give beneficiaries a more generous drug benefit, full coverage for preventive care and lower out-of-pocket costs for hospital stays, the Journal reports (Wall Street Journal, 3/4). The "Enhanced Medicare" option would allow private plans to offer different drug benefits, with different premiums, copayments and deductibles, so long as plans meet "a basic federal standard," which is not yet set, the New York Times reports. To assuage concerns that private health plans might not be available in rural areas, the "Enhanced Medicare" option would divide the country into 10 regions, and the government would then contract with several private plans in each region (Pear, New York Times, 3/4). The third option, called "Medicare Advantage," would be similar to Medicare+Choice, which offers beneficiaries a choice of private plans with and without drug coverage but no guaranteed drug benefit, the Washington Post reports. Bush aides said that implementing the proposals under the administration's new Medicare framework would still cost $400 billion over 10 years (Allen, Washington Post, 3/4). According to the Journal, Bush sees private, supplemental Medicare plans as "the only way to rein in galloping Medicare costs," and a 12-page White House document suggests the new Medicare reform plan is designed to "ensure that benefits offered under 'Enhanced Medicare' are sufficiently attractive to seniors, relative to traditional Medicare," to guarantee "a viable system" (Wall Street Journal, 3/4).
Sen. John Breaux (D-La.), who opposed the reported first version of Bush's plan, said the new plan "is a step toward a compromise" that he and other lawmakers had sought, USA Today reports (USA Today, 3/4). Senate Finance Committee Chair Charles Grassley (R-Iowa) said, "The president looks like he's taken steps in the right direction." House Energy and Commerce Committee Chair Billy Tauzin (R-La.) added that the reported plan offers "more we can agree upon right now than disagree" (Washington Post, 3/4). However, some Democrats "immediately denounced the plan as insignificant and called it the first step toward privatizing Medicare," the Philadelphia Inquirer reports (Kuhnhenn, Philadelphia Inquirer, 3/4). "The White House should not be forcing seniors to choose between the doctor they know and trust and the drugs they need," Jay Carson, a spokesperson for Senate Minority Leader Tom Daschle (D-S.D.), said (Carter, AP/Nando Times, 3/4). Rep. Pete Stark (D-Calif.) added, "This is basically turning an entitlement into a voucher plan" (Washington Post, 3/4).
House Democrats today plan to introduce a "far more expansive" Medicare reform proposal than Bush's, CongressDaily/AM reports. The plan, which is similar to one introduced last year, would call for a voluntary drug benefit that would have a $25 monthly premium, a $100 annual deductible and cover 80% of drugs costs up to a $2,000 out-of-pocket limit after which Medicare would pay the remainder of the drug costs. The HHS secretary would be given "explicit authority" to negotiate lower drug prices and use "other techniques" to keep the drug benefit's total cost down, CongressDaily/AM reports (Rovner, CongressDaily/AM, 3/4). The House Democrats' plan would cost between $700 billion and $900 billion over 10 years, the New York Times reports (New York Times, 3/4). Senate Democrats are backing the $600 billion, 10-year Medicare drug benefit bill that Sens. Bob Graham (D-Fla.) and Zell Miller (D-Ga.) introduced last year, CongressDaily reports. That plan calls for a $25 monthly premium, 50% cost-sharing and catastrophic coverage that would start after beneficiaries spent $3,500 on medications in one year (Fulton, CongressDaily, 3/3).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.