2003-09-17 -- House Conservatives List Requirements on Medicare Prescription-Privatization

New York Times, September 18, 2003

House Conservatives Issue a Make-or-Break Medicare List

By ROBERT PEAR


WASHINGTON, Sept. 17 - Conservative House Republicans, a bloc crucial
to passage of any Medicare drug legislation, issued a manifesto today
insisting on some mechanism to control the cost of new drug benefits
for the elderly.

The conservatives also threatened to vote against the legislation
unless it required the traditional Medicare program to compete
directly with private health plans in 2010.

"Taxpayer costs will be driven down through the forces of
competition," the conservatives said in a letter to Speaker J. Dennis
Hastert, Republican of Illinois.

Such competition is anathema to many Democrats. Representative Pete
Stark of California, the senior Democrat on the Ways and Means
Subcommittee on Health, called the proposal "a cockamamie scheme" to
privatize Medicare, and he asserted that it would not save money.

The letter to Mr. Hastert was signed by 13 House Republicans. All
voted for the Medicare bill passed by the House in June. The bill was
approved by one vote, 216 to 215, so any House member who supported it
can expect to have some influence over negotiators trying to work out
a compromise between House and Senate versions of the legislation.

The conservatives who signed the letter, led by Representative Patrick
J. Toomey of Pennsylvania, include Sue Myrick of North Carolina, a
deputy whip, and freshmen like Trent Franks of Arizona, Scott Garrett
of New Jersey and Jeb Hensarling of Texas.

The conservatives said they had consulted Representative Tom DeLay of
Texas, the majority leader. The letter gives Mr. DeLay "greater
leverage, greater power" in negotiations with the Senate, Mr. Franks
said.

The challenge for Republican leaders is to retain the support of
conservative House members without alienating Democrats and moderate
Republicans who voted for the Senate bill, which passed 76 to 21. Many
lawmakers and lobbyists say the legislation will not emerge from
Congress this year unless President Bush makes a strong push for it.

Senator Edward M. Kennedy, Democrat of Massachusetts, said, "President
Bush has to decide whether he's willing to say no to his right-wing
House supporters."

Pete Jeffries, a spokesman for Mr. Hastert, said: "The speaker is well
aware that there are different factions in the House Republican
conference, with different opinions. It's good to hear the concerns of
our rank and file, so they can help shape the final policy."

The Congressional Budget Office has estimated that the Senate and
House bills would cost slightly more than $400 billion over 10 years.

Mr. Hensarling said such estimates had "less predictive value than a
Ouija board." Mr. Hastert said he would work with the conservatives to
ensure that the cost does not exceed $400 billion.

In the letter to Mr. Hastert, the lawmakers laid out four conditions
for supporting a Medicare prescription drug bill:

*  No price controls can be imposed on the drug industry.

*  The government must offer new tax incentives for people to
establish savings accounts from which to pay their medical costs.

*  The fee-for-service Medicare program must compete directly with
private health plans, as envisioned in the House bill.

*  The cost of drug benefits must not exceed $400 billion over 10
years.

Several House conservatives said they were considering a plan that
would set a limit on Medicare spending for prescription drugs in each
of the next 10 years. Under the proposal, if spending exceeds the
limit in any year, the government would automatically reduce its
subsidies for Medicare drug benefits, or the beneficiary's share could
be increased through higher co-payments.

Alternatively, the Republicans said, if costs exceed the limit in any
year, Congress could be required to vote promptly on legislation to
reduce future costs.

"We can't afford an open-ended entitlement that has no limitations on
costs," said Mr. Toomey.

In their letter, the conservatives said Congress should consider an
alternative if House and Senate negotiators cannot agree on a bill
offering drug benefits to all Medicare recipients. Instead, they said,
Congress could assist people who have low incomes or very high drug
costs.

The other Republicans signing the letter were J. Gresham Barrett of
South Carolina, Roscoe G. Bartlett of Maryland, Joe L. Barton of
Texas, Marsha Blackburn of Tennessee, John Carter of Texas, Tom Feeney
of Florida, Joe Pitts of Pennsylvania and David Vitter of Louisiana.