Sweeping Medicare bill passes


WASHINGTON - Hours after Congress gave final approval to a sweeping Medicare measure, President Bush said yesterday that he would be "honored" to sign the bill, which for the first time would give the elderly and disabled help in paying for prescription drugs and grant private insurers a central role in the health care program.

Its enactment would represent a big political victory for Bush and the Republican Party. Senate approval of the bill yesterday morning followed House passage late last week.

"Today, we had a major victory to improve the health care system in America," Bush said during a speech at a hospital in Las Vegas. "Some said Medicare reform can never be done. For the sake of our seniors, we've got something done."

The bill constitutes the largest expansion of Medicare since its inception in 1965, an improbable achievement for a Republican president and a Congress led by conservatives, many of whom rose to power vowing to shrink the government.

The measure would set aside $400 billion over the next decade to provide the drug benefit. It contains billions more for payments to doctors and hospitals, incentives for companies that offer retiree health benefits to continue that coverage and payments to private insurers to induce them to cover seniors.

"Today is an extraordinary, it's a fateful and it's a red-letter day for seniors, and indeed for all Americans," said Senate Majority Leader Bill Frist of Tennessee, a heart surgeon who made a Medicare overhaul one of his signature issues.

The Senate vote was 54-44. Eleven Democrats and one independent joined 42 Republicans to support it. Eight Republicans, mainly fiscal conservatives who oppose large spending programs, joined 36 Democrats to oppose the measure. Maryland's two Democratic senators, Barbara A. Mikulski and Paul S. Sarbanes, voted against the bill.

The measure was approved over the fierce objections of many Democrats, including Sen. Edward M. Kennedy of Massachusetts, his party's leading voice on health care, who said the plan would "begin the unraveling of Medicare."

Democratic leaders wasted no time in launching what promises to be an intense election-year drive against the bill, including legislation that would repeal key elements of it.

"The effort to reform the Medicare reform bill begins today," said Senate Minority Leader Tom Daschle of South Dakota. "This debate is not over. It's just beginning."

Republicans hope that completion of the landmark Medicare measure will give them a politically vital foothold leading to the 2004 elections on an issue that has long been the domain of Democrats. Vigorous support for the bill from the influential AARP, which represents 35 million senior citizens, helped lend credibility to that effort.

Still, it remains to be seen how the public, and especially seniors - who vote in disproportionately large numbers - will react to the bill.

Fiscal conservatives opposed the measure as a recklessly expensive expansion of an already huge government entitlement. As Democrats complained that the bill would go too far toward privatizing Medicare and eroding the government's responsibility for covering seniors, some Republicans said it failed to go far enough toward those ends.

"This bill threatens the fiscal security of the Medicare program and compromises the continued growth of our economy by lacking the necessary cost controls to keep it from consuming our domestic budget," said Sen. John Ensign of Nevada, one of the eight Republicans who voted against the measure.

He predicted that "before the ink is dry," proponents would try to expand it further.

The centerpiece of the legislation is the creation, in 2006, of prescription drug coverage for Medicare beneficiaries. Seniors could choose to stay in traditional Medicare or obtain health benefits from private plans. Either way, private companies would offer the drug benefit.

Next spring, seniors could buy a $30 drug card, for discounts of 10 percent to 25 percent on prescription drugs, until the benefit took effect two years later.

Beginning in 2006, for a monthly premium of about $35 - about $420 a year - senior citizens and the disabled would have part of their prescription costs covered by the government. After meeting a $250 deductible, they would pay 25 percent of their drug costs, up to $2,250. They would have to pay all their prescription costs between $2,251 and $3,600. Beyond that level, the government would cover 95 percent of drug expenses.

Beneficiaries who earn $12,123 or less would receive further help. They would pay no premium and no deductible. Nor would they fall into the coverage gap between $2,251 and $3,600that other seniors would have to pay for themselves. The discount card available in 2004 would give them a $600 annual subsidy to pay for prescription drugs.

Democratic opponents said they believed that once seniors fully understand the new benefit, they will be unhappy, especially with the coverage gap that could leave many of them with prohibitively high drug costs.

"It is a very sad day, because of a squandered opportunity to truly change history and truly change the lives of seniors," said Mikulski, who said she had considered voting for the bill but ultimately decided it was bad for Maryland seniors. "Instead of a great feeling of joy and relief, senior citizens are now facing anxiety and also disappointment."

While denouncing the drug benefit as stingy, Democrats reserved their harshest criticism for other aspects of the bill, including provisions that nudge Medicare toward the private sector and the omission of any steps to control the exploding costs of pharmaceuticals.

They objected to a section in the bill that bars the government from using its considerable power to negotiate lower prices from drug companies. Democrats also said the bill should have included a provision, dropped by Republican negotiators, that would have allowed wholesalers to import domestically made brand-name drugs from countries where they sell for a fraction of the U.S. price.

The measure bears the mark of the Republican Congress that passed it. It provides $6 billion in tax breaks for people who set up savings accounts for their medical expenses.

Some conservatives cheered the inclusion of new wealth tests that would, for the first time in Medicare, base how much money certain senior citizens will pay for health benefits on how much money they have.

Low-income seniors would have to show that they had no more than $6,000 in assets to take advantage of the higher level of drug assistance. Seniors earning $80,000 or more would have to pay a larger share of their Medicare premium than other beneficiaries would.

The bill would begin a cost comparison in 2010: It would put traditional Medicare in competition with private insurers to see which could cover seniors more cheaply. Medicare would determine, based on the competing estimates, how much to subsidize health care coverage.

Democrats warn that such a system would force seniors to choose between joining private plans that limit their choice of doctors and staying in Medicare and paying higher premiums.

The bill would create a limited test of the system in six metropolitan areas for six years. Premiums could rise, but no more than 5 percent a year.

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