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2003-11-12 -- Tentative Pact on Medicare Prescription-Privatization Bill
The Alliance for Retired Americans, Senior Action
Network, and the San
Francisco Gray Panthers accept no Medicare Restructure involving
"premium support" or "direct competition" between original Medicare
and managed care organizations such as HMOs or Preferred Provider
Organizations, even on a trial basis as outlined here.
AARP's acceptance of this plan is a betrayal to seniors, and we call
on its membership to let its leadership know this.
New York Times, November 13, 2003
Tentative Medicare Pact Offers Drug Benefits to Elderly
By ROBERT PEAR
WASHINGTON, Nov. 12 - House and Senate leaders said on Wednesday that
they had reached a tentative agreement on a bill to provide
prescription drug benefits to the elderly, but many Democrats spurned
it, saying parts of the deal would weaken the traditional
government-run Medicare program.
Details of the proposed agreement were disclosed bit by bit, in a
series of events that left the ultimate prospects for enactment of
Medicare drug benefits uncertain.
Republicans said they had secured the tentative deal by scaling back
their demands for direct competition between private health plans and
the traditional Medicare program, which serves more than 85 percent of
the 40 million beneficiaries. The compromise was proposed by the
Senate majority leader, Bill Frist, Republican of Tennessee, with
support from Speaker J. Dennis Hastert, Republican of Illinois.
Under the tentative agreement, the secretary of health and human
services would designate four metropolitan areas and one region of the
country for a three-year test of competition. The secretary could
extend the test for another three years, after which it would end
unless Congress intervened.
In the locations chosen for the test, elderly people could stay in
traditional Medicare but would have to pay higher premiums if the
program proved to be more expensive than private health plans, said
Senator John B. Breaux of Louisiana, one of two Democrats who took
part in the negotiations.
Low-income people would be exempt from increases in premiums, Mr.
Breaux said, and for other beneficiaries, the increases would be
limited to 10 percent a year.
Mr. Breaux said he supported the agreement, describing it as "a
middle-of-the-road deal." The other Democrat in the talks, Senator Max
Baucus of Montana, said he was "inclined to support" the proposal.
But the Democrats' main strategist on health care issues, Senator
Edward M. Kennedy of Massachusetts, rejected the package, especially a
proposal to lure private health plans into Medicare with billions of
dollars in new federal subsidies.
"We cannot accept a proposal that is going to threaten the whole
Medicare system," Mr. Kennedy said. He denounced the proposal for
competition as "an untried, untested, unworkable program."
Republican aides on Capitol Hill said the Bush administration would
probably back the deal, which calls for the biggest expansion of
Medicare since its creation in 1965.
President Bush plans to call for swift action in a speech on Medicare
in Florida on Thursday, White House officials said. His remarks will
be carried to forums organized by AARP, the lobby for older Americans,
in Cleveland and Dallas.
Whether Republicans can push a final bill through the Senate over Mr.
Kennedy's opposition is uncertain. So Republicans might have to revise
the legislation outlined on Wednesday. It is also unclear whether the
latest plan would win enough conservative support to pass in the
House, even though Mr. Hastert and the majority leader, Tom DeLay of
Texas, have endorsed it.
The deal proposed by Dr. Frist and Mr. Hastert apparently came as a
surprise to Representative Bill Thomas, the California Republican who
has been presiding over the Medicare negotiations since July.
A House Republican said Mr. Thomas believed that the proposal did not
do enough to make Medicare fiscally sustainable. A Senate Republican
said Mr. Thomas was "not happy" that a deal had been cut over his
head. But the Republican added, "There is a time when leaders have to
make the hard decisions."
Conservative House Republicans said they believed the private plans
would save money for Medicare in the long run. But Mr. Kennedy said
the competition could disrupt health care and increase premiums for
more than 10 million of the 40 million Medicare beneficiaries.
"That would be the demise of the Medicare system as we know it," said
Mr. Kennedy, who supported the bipartisan Medicare bill passed by the
Senate in June.
The move to inject market forces into Medicare, under a proposal known
as premium support, was not enough to satisfy some conservatives.
"The preliminary reports that the Medicare conference bill will
include only minimal competition provisions are very disappointing,"
said Representative Patrick J. Toomey, Republican of Pennsylvania.
Representative Jeb Hensarling, Republican of Texas, said, "Watering
down premium support to merely a demonstration project, as initial
reports suggest, will not thrill any conservative."
Mr. Breaux said the tentative agreement included two other proposals
sought by conservatives. Congress would have to vote on cost-control
measures if general tax revenues account for more than 45 percent of
Medicare spending. The program is expected to cross that threshold in
2016, he said.
In addition, people of all ages could establish tax-preferred savings
accounts for medical expenses.
The Senate Democratic leader, Tom Daschle of South Dakota, said the
tentative deal was "very disturbing" and he predicted that it "would
not be well received in our caucus."
The agreement seems likely to split the ranks of Senate Democrats,
with liberals opposed and moderates tempted to support it.
"I'm not saying it's a done deal," said Senator Mary L. Landrieu,
Democrat of Louisiana. "But the latest outline of a compromise seems
promising. Hundreds of thousands of elderly people in my state have
been waiting in expectation of something right around the corner for
the last six years."