Dems face off with Bush on Medicare Letter to president condemns competition, spending limits

WASHINGTON – Republican demands for competition between Medicare and private insurance plans emerged Thursday as the key obstacle in negotiations for a new prescription drug benefit for older Americans.

The issue is so highly charged that even the term for the concept, “premium support,” was causing trouble in the negotiations, Sen. Charles Grassley, R-Iowa, said.

Requiring traditional Medicare, the government health insurance program for the elderly and the disabled, to compete with private plans has been a demand of conservative Republicans, who hold sway in the House.

“If a bill is going to the president, it’s going to have to have at least enough of it to pass the House of Representatives,” Grassley said at the end of a long negotiating session Thursday night.

But Senate Democrats, whose support is crucial for passage in that chamber, are united in their opposition. They made their view plain Thursday in a meeting with the two Democratic senators who are part of the negotiations.

“It’s a poison pill I could never swallow,” Sen. Kent Conrad, D-N.D., said after Democrats met in private to review the negotiations. “It’s the one thing that truly endangers Medicare.”

The Democratic negotiators, Max Baucus of Montana and John Breaux of Louisiana, conveyed the Democrats’ sentiments during the evening session, lawmakers said.

Democrats also gave President Bush a list of conditions for their support of the legislation, rejecting what they called “arbitrary limits” on spending.

“The president can solve this problem,” said Democratic leader Tom Daschle of South Dakota. He appealed to the president to urge Republicans to toss out proposals on premium support and spending limits.

Under the House bill, beginning in 2010 the premium price for traditional Medicare would be determined in competition with private plans, rather than fixed by government formula. Democratic critics argue that would eventually force Medicare premiums to rise. In turn, they argue, that would start sending healthier seniors into private plans with lower costs, leaving the sicker patients behind in a program with ever-higher costs.

The letter was signed by 39 Democrats, one Republican and one independent. It highlighted some of the most contentious, unresolved issues that remain four months after the House and Senate passed differing versions of the legislation, which would mark the largest expansion of Medicare in its 38-year history.

Negotiations were entering a critical phase.

The core group of negotiators, House and Senate Republicans, joined by two Senate Democrats and administration representatives, stayed at the table in Rep. Bill Thomas’ Capitol private office reviewing options to resolve long-standing differences.

At one point, the lawmakers asked their aides and administration officials to leave the room, a signal perhaps of increasing intensity.

They discussed ways to ease some of the cuts in payments to hospitals and to doctors who administer cancer drugs, according to people familiar with the talks. One idea under consideration would encourage hospitals to meet quality assurance guidelines by allowing them to escape up to $12 billion in cuts, these people said.

The negotiators also looked for ways to lessen the impact on home health services from a proposed co-payment for home health visits.

Lawmakers also agreed to drop one of the two categories of tax-preferred health savings accounts that conservatives have deemed essential for their support.

While the letter listed several points for Bush’s attention, several Democrats speaking on condition of anonymity said it was designed largely to slow any rush toward agreement that may be developing.

Republicans hope to finish the broad outline of an agreement by week’s end, which would put them on track to have a final vote by mid-November. Daschle said Thanksgiving was a more realistic possibility.