President Bush Urges House, Senate Lawmakers To Reconcile Medicare Reform Bills

President Bush on Saturday asked House and Senate lawmakers to "quickly resolve their differences" over Medicare reform legislation and send him a bill, the AP/Washington Post reports. In his weekly radio address, Bush said, "Congress must now pass a final bill that makes the Medicare system work better for America's seniors. This is an issue of vital importance to senior citizens all across our country. They have waited years for a modern Medicare system, and they should not have to wait any longer" (AP/Washington Post, 6/29). Both chambers of Congress early Friday morning approved Medicare bills that call for a prescription drug benefit and a larger role for private health plans in the program (California Healthline, 6/27). In a Rose Garden appearance Friday, Bush praised lawmakers for passing reform legislation after years of deadlock on the issue (Dewar/Goldstein, Washington Post, 6/28). White House press secretary Ari Fleischer would not say whether Bush prefers the House or Senate reform package. However, Fleischer suggested that Bush would sign anything the conference committee produces, the AP/Post reports. "The president didn't get everything he wanted in either the House or the Senate bill, but he got much of what he wanted," Fleischer said (AP/Washington Post, 6/29).

House Bill

The House voted 216-215 to approve a bill (HR 1) that 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%.

Senate Bill

The Senate voted 76-21 to approve a bill (S 1) that 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 (California Healthline, 6/27).

'Long and Difficult' Conference?

Members of the conference committee charged with reconciling the House and Senate reform proposals could be embroiled in a "long and difficult" process, the Washington Times reports. Several "key differences," including provisions in the House bill that would require Medicare to compete directly with private plans beginning in 2010 and institute a means test, could force the committee into "contentious" and partisan debates, the Washington Times reports. Democrats will likely fight such provisions in conference, while Republicans will attempt to strengthen the provisions. Rep. Jim DeMint (R-S.C.), one of 19 House Republicans who voted against the bill, said that before the House vote Friday, Bush promised that the administration is "committed to making the bill more acceptable to conservatives," according to the Times. House Speaker Dennis Hastert (R-Ill.) said, "It's my commitment to try to keep [the competition provision] in" (Fagan, Washington Times, 6/28). The Baltimore Sun reports Democrats also are "at odds" with Republicans over charging beneficiaries with higher incomes a larger portion of their Medicare premiums. The Senate originally approved such a measure by a 59-38 vote, but Senate leaders dropped the provision after Sen. Edward Kennedy (D-Mass.) threatened to filibuster the entire Medicare bill if the provision was included (Hirschfeld Davis, Baltimore Sun, 6/28). In addition, a Senate provision that would allow the federal government to provide "fallback" drug coverage in areas without at least two private plans may also be a source of contention. Democrats say the provision is "essential" to ensure access to drug benefits for all beneficiaries, while Republicans say such an option would "undercut" private plans' willingness to enter such markets, according to the Los Angeles Times (Kemper/Hook, Los Angeles Times, 6/28). Provisions that would adjust the payment system for oncologists administering medications to beneficiaries, increase payments for private plans in Medicare+Choice and allow reimportation of U.S.-made drugs from Canada are other issues that could become "bargaining chips between the House and Senate," the Wall Street Journal reports (Rogers/Lueck, Wall Street Journal, 6/30). How much beneficiaries will have to pay out-of-pocket before drug coverage takes effect also is expected to be a "political battle," the Chicago Tribune reports (Neikirk, Chicago Tribune, 6/29).

Slow Down

Republican leaders in the House and Senate Friday said that the conference committee will face a "delicate ... task" and might not work at the same speed at which both chambers passed their respective versions, the Los Angeles Times reports (Los Angeles Times, 6/28). Hastert on Friday said he spoke with Senate Majority Leader Bill Frist (R-Tenn.) and although both leaders are "committed to producing a final agreement" on reform legislation, they have not yet set any "firm deadlines" for when the conference committee would finish, CongressDaily reports. "We want to do this in a timely way, but this is a very complicated process. We need to take our time and do the policy right," Hastert said (Wegner, CongressDaily, 6/27). Frist reiterated that he wants the conference committee process to be "deliberative," adding that he will not push the committee to finish before Congress' August recess, CongressDaily reports. "We've got to get this right. At this juncture, we've got to spend whatever time it takes," Frist said (Heil, CongressDaily, 6/27). Members of the conference committee have not yet been named, the Los Angeles Times reports (Los Angeles Times, 6/28). AARP Policy Director John Rother urged legislators to act quickly in forging a compromise. "The longer this legislation hangs out there, the more it becomes a target for special interest groups," Rother said (Pear, New York Times, 6/28).

Broadcast Coverage

The following broadcast programs reported on the passage of the Medicare legislation:

ABCNews' "This Week": The program interviews Frist (Stephanopoulos, "This Week," ABCNews, 6/29). The full segment is available online in RealPlayer.
CBS's "Evening News": The program reports on seniors' reactions to the bills' passage (Chen, "Evening News," CBS, 6/27). The full segment is available online in RealPlayer.
C-SPAN's "Washington Journal": The program interviews Congressional Quarterly senior health reporter Mary Agnes Carey about the bills' passage ("Washington Journal," C-SPAN, 6/30). The full segment will be available online in RealPlayer after the broadcast.
NBC's "Nightly News": The segment includes comments from political analysts Charlie Cook and Bill McInturff (O'Donnell, "Nightly News," NBC, 6/27). The full transcript and video of the segment in Windows Media are available online.
NPR's "All Things Considered": The segment includes comments from Rep. Rob Andrews (D-N.Y.), Bush, Rep. Jim Davis (D-Fla.), Rep. Tom DeLay (R-Texas), Rep. John Dingell (D-Mich.), Frist and Kennedy (Rovner, "All Things Considered," NPR, 6/27). The full segment is available online in RealPlayer.
NPR's "Tavis Smiley Show": The program interviews David Certner, director of federal affairs for AARP, and Ed Coyle, executive director of the Alliance for Retired Americans, about the legislation passage (Cox, "Tavis Smiley Show," NPR, 6/27). The full segment is available online in RealPlayer.
NPR's "Weekend Edition Saturday": The segment includes comments from Kennedy and Rep. Bill Thomas (R-Calif.) (Rovner, "Weekend Edition Saturday," NPR, 6/28). The full segment is available online in RealPlayer.
NPR's "Weekend Edition Saturday": NPR's Scott Simon interviews Robert Ball, a member of President Lyndon Johnson's administration who helped start Medicare and ran the program for the first seven years (Simon, "Weekend Edition Saturday," NPR, 6/28). The full segment is available online in RealPlayer.
PBS' "NewsHour with Jim Lehrer": The segment reports on the House and Senate passing Medicare legislation (Holman, "NewsHour with Jim Lehrer," PBS, 6/27). The full segment is available online in RealPlayer.

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.