WASHINGTON – The Republican-controlled Congress sent President Bush historic Medicare legislation Tuesday, combining a new prescription drug benefit with measures to control costs before the baby boom generation reaches retirement age.
Bush is expected to sign the bill with a flourish, then trumpet its enactment during his bid for re-election next year. “Because of the actions of the Congress, the actions of members of both political parties, the Medicare system will be modern and it will be strong,” he said in Las Vegas shortly after lawmakers broke years of gridlock on the issue.
But within hours of a 54-44 Senate vote, Senate Democratic leader Tom Daschle introduced legislation to repeal several of the bill’s most controversial provisions and to allow the importation of lower-priced prescription drugs from Canada and Western Europe. “This debate is not over, it’s just beginning,” said the South Dakota Democrat.
Apart from a new prescription drug benefit, the legislation invites private firms to sell insurance coverage to 40 million Medicare beneficiaries.
While some supporters praised the bill in glowing terms and some critics denounced it with equal vehemence, many lawmakers said the far-reaching legislation had confronted them with a difficult choice.
“This was not an easy vote for me,” said Sen. Dianne Feinstein of California, one of 11 Democrats who supported the bill on final passage. “I know there are doubters out there. … All I say to them is, give it a chance to work.”
Republican Sens. Olympia Snowe and Susan Collins of Maine both voted in favor of the legislation.
“I agree with groups like the AARP who say the bill is imperfect, but we simply cannot allow the quest for perfect to become the enemy of what is good,” said Collins. “This historic opportunity may never come again, and we cannot afford to let it pass.”
Collins pointed out that the bill will increase Medicare’s payments to Maine hospitals by more than $125 million over the next 10 years and payments to Maine physicians by about $7 million a year.
Agreeing that the enhancement to Medicare “represents a good beginning for America’s seniors,” Snowe added, “Now, there will be no returning to the days when Medicare lived in the ‘dark ages,’ oblivious to the remarkable drugs available to save lives, prevent disease, and halt the progression of disease.
“And there will be no returning to the days when a quarter of our nation’s seniors struggled without any assistance whatsoever in paying for the prescription drugs that can be the difference between a decent quality of life, and life itself.”
The bill’s passage also was praised by the Maine Medical Association, which represents more than 2,400 physicians in the state.
“Finally, Maine’s senior citizens will get some help with the cost of their prescription drugs through Medicare,” said MMA’s president, Dr. Maroulla S. Gleaton, an Augusta ophthalmologist. Gleaton also emphasized that improvements in reimbursement and administrative aspects of Medicare will help to maintain access to the broadest range of physicians for Maine’s Medicare beneficiaries.
The complexity of the 681-page, $395 billion measure – and the two-year delay in implementing the new drug coverage – have made it subject to competing claims and uncertain estimates.
For seniors obtaining drug coverage through a stand-alone plan in 2006, for example, officials estimate a benefit with a $35 monthly premium and a $250 annual deductible, followed by 75 percent coverage up to $2,250 in costs. There would be a break in coverage over that level until costs reached $5,100 – a gap of $2,850 – before benefits resumed and began paying 95 percent of remaining costs.
But an official forecast by Congress’ budget experts envisioned a steady increase in premiums and deductibles as well as a widening of the coverage gap in the following years, with insurance payments growing as well. By 2013, according to the estimates, the monthly premium would be $58, the deductible would reach $445 and the beneficiary would be required to pay all costs between $4,000 and $9,066 before coverage resumed.
“I think these numbers will come as a shock to consumers, and they are pretty optimistic projections based on what drug costs are going to do,” said Gail Shearer, a health policy analyst at Consumers Union and an opponent of the legislation. She noted the focus has been on 2006, the year the prescription drug benefit begins.
At the same time, the Congressional Budget Office said, Medicare’s contribution also would rise each year so that the program would pay $1,500 of the first $2,250 in drug costs in 2006 and $2,666 of the first $4,000 in 2013.
Insurance premiums, which are not set in the bill even for 2006, are projected to increase 65 percent to $58 a month by 2013.
The numbers were contained in a CBO analysis provided to Sen. Don Nickles, R-Okla., the Senate Budget Committee chairman, and are posted on the CBO Web site.
The projections reflect the lawmakers’ decision to tie the cost of the program to increases in drug costs from inflation, new costly drugs coming on the market and expected increases in drug purchases.
“The numbers inflate with the cost of the program. I think that’s a good provision,” said Nickles, who voted against the bill.
Seniors who choose a new private health plan, either an HMO or preferred provider organization, would receive drug coverage as part of a combined benefit.
The legislation was an attempt to balance competing interests in a Congress sharply divided along party lines. On one side, the measure includes a costly new prescription drug benefit for 40 million Medicare beneficiaries, with subsidies for low-income seniors and billions of dollars to discourage corporations from dropping existing coverage for their retirees. Also included is $25 billion in additional funding for rural hospitals and other health care providers.
At the same time, the bill reflects the eagerness of many conservatives to give seniors the option of private insurance coverage, a step they argued could lead to more modern and efficient health-care coverage. Still other changes are aimed primarily at controlling costs.
With the first members of the baby boom generation due to reach Medicare eligibility age in 2011, several lawmakers argued that fundamental changes were required to maintain the program’s finances. By 2029, according to Census Bureau figures, all 78 million baby boomers will be age 65 or over.
For the first time, seniors earning more than $80,000 a year would be required to pay higher premiums than other beneficiaries for their Part B Medicare coverage. Part B covers doctor visits and other out-of-hospital services.
Another provision would increase the annual deductible for Part B coverage from $100 to $110 in 2005, and tie future increases to the growth in overall non-hospital spending under Medicare. The deductible has not changed since 1991.
Conservatives, in particular, pointed to a series of other changes in the legislation that they said would curtail costs over the longer term – and each of them drew sharp criticism from Democrats eager to defend the existing government-run program.
One would require the president to recommend changes in the program if spending exceeded predetermined levels. The legislation includes rules designed to guarantee votes on the House floor on alternatives as diverse as cutting benefits or raising taxes. The same rules are designed to prod the Senate to act but do not guarantee a vote.
The bill’s most controversial feature would begin a limited program of competition beginning in 2010 between traditional Medicare and the new private plans. Conservatives who support the provision argue it would help hold down costs. Democratic critics, backed by estimates produced by the Medicare program’s actuaries, argue it would lead to increased premiums for seniors who remain in the traditional benefit program.
Some of the Republicans who voted for the bill sought assurances in advance from the administration that cities in their states would not be chosen for the competition.
The House approved the bill early Saturday, on a vote of 220-215. In the Senate, 42 Republicans, 11 Democrats and one independent voted for the bill, while 35 Democrats and nine Republicans opposed it. The only absent senators were presidential hopefuls John Kerry of Massachusetts and Joe Lieberman of Connecticut, who were present on Monday for a pair of test votes that settled the bill’s fate, then left to campaign.
Another presidential hopeful, North Carolina Sen. John Edwards, remained in the Capitol long enough to vote against the bill on final passage.
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