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Privatization of medicare { June 27 2003 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A37659-2003Jun26.html?nav=hptop_tsSome House Democrats wore black armbands, signaling their belief that the measure is inadequate and could threaten Medicare altogether by pushing it toward privatization.
http://www.washingtonpost.com/wp-dyn/articles/A37659-2003Jun26.html?nav=hptop_ts
Medicare Bills Would Add Drug Benefits
Prescription Drug Benefit Is Key To Biggest Changes in 38 Years
By Amy Goldstein and Helen Dewar
Washington Post Staff Writers
Friday, June 27, 2003; Page A01
The House and Senate early today adopted the most far-reaching and most expensive changes to Medicare in its history, offering all 40 million people in the program help in paying for prescription drugs and expanding the role of private health plans in caring for the nation's senior citizens.
The legislation would cost $400 billion over the next decade and would subsidize medicine for elderly and disabled Americans beginning in three years. People would buy such coverage through new drug insurance policies or through preferred-provider organizations (PPOs) and other types of private health plans, which would receive government payments to encourage them to accept Medicare patients. Patients with especially low incomes would receive extra help.
As an interim step, the measures would, in slightly different ways, allow patients to buy, from federally approved companies, discount cards designed to provide savings from retail drug prices.
A cliffhanger House vote and the comfortable Senate majority climaxed years of efforts to redesign Medicare, a 38-year-old entitlement program that is a cornerstone of the government's assistance to its older citizens. The legislation's passage marked the first time that both chambers embraced the idea of a federal drug benefit, a pent-up demand of older voters.
The House approved GOP Medicare bills in the past two years, but the Senate had never before agreed on how to redesign the program. After 2 a.m., House Republicans scrounged for a final few votes before the measure passed, 216 to 215.
The two chambers will begin negotiating their differences next month and, if they succeed, would forward the result to President Bush for his signature. Bush has indicated he would sign the measure, although the White House has requested some changes.
Lawmakers spoke of yesterday's events in historic terms. "This day, in my opinion, has been too long in coming," House Ways and Means Committee Chairman Bill Thomas (R-Calif.) said. Thomas, who has pressed for a Medicare overhaul for years, called the legislation "the most fundamental and important changes to Medicare since its inception."
Immediately after the 76 to 21 Senate vote, Majority Leader Bill Frist (R-Tenn.) said: "Tonight, we are one step closer to providing real health security for seniors all across the nation." He said the legislation "combines the best of the public and private sectors and positions Medicare to evolve with the medical treatment of the future."
Political theater filled the Capitol yesterday. House Republicans invited elderly constituents, some in wheelchairs, to an afternoon rally to support the chamber's bill. Some House Democrats wore black armbands, signaling their belief that the measure is inadequate and could threaten Medicare altogether by pushing it toward privatization.
Vice President Cheney visited the House before noon, part of an 11th-hour lobbying blitz and another symbol of White House support for congressional progress on the issue. In recent weeks, Bush repeatedly urged Congress to pass the legislation even though House and Senate GOP leaders had rejected his bid to offer better drug benefits to Medicare patients willing to join private health plans.
The two bills reflect some philosophical differences between the Senate and the House's GOP majority, particularly over how much the government should foster private-sector competition to Medicare, which was created in 1965. In the Senate, where Republicans have a 51 to 49 edge, leaders of both parties shaped the bill. Yesterday, Sen. Max Baucus (Mont.), the Finance Committee's ranking Democrat, said the Senate version was built on delicate compromises that could crumble if House members insist on major changes in the conference committee.
The House GOP, which enjoys a larger majority, built support for its version almost entirely with Republicans, triggering strenuous Democratic objections. "This is the first step that has been specifically designed not to reform the Medicare system as we know it, but to dissolve it," Rep. Charles B. Rangel (D-N.Y.) said.
Last night, House Democrats offered an alternative measure that would devote more than twice as much money to drug subsidies and secure a stronger role for the program's traditional version. It was defeated 175 to 255, shortly before the final vote in favor of the Republican legislation.
Lawmakers from Congress's political right and left edges raised the main objections to the legislation. Conservative Republicans said Medicare needs stronger market competition than the legislation would create. Liberal Democrats said the legislation would not provide enough subsidies for elderly Americans and would undermine Medicare's traditional fee-for-service version, in which patients can visit their doctors when they want.
The House debate was sharp-edged. House Minority Leader Nancy Pelosi (D-Calif.) said the approach favored by the GOP would "unravel Medicare," prompting employers to drop health insurance for retirees and to eventually require people who want to remain in the original program to pay more for it. "This is really a tragedy," she said.
Speaker J. Dennis Hastert (R-Ill.) countered that the changes would create "a compassionate program for senior citizens. . . . We cannot let the system grow so big it bankrupts the country. We must introduce market reform." He called this morning's action "a defining moment for this Congress."
The Senate vote came after nearly two weeks of debate, during which senators considered almost 40 amendments.
The House conducted its deliberations in 61/2 hours. The debate there started at about 7 p.m., after GOP leaders spent several hours scrambling to ensure the 218 votes needed for passage. For a while, those votes appeared uncertain, because a block of conservative Republicans objected to several provisions.
In part to secure their support, the House first voted to help people afford health insurance by allowing them to create special tax-free accounts. Such "health savings accounts" are popular among many conservatives. The version approved, in a 237 to 191 vote, would provide $174 billion in tax reductions over the next decade -- far more than those in the version approved recently by the Ways and Means Committee.
In a sign of the issue's political significance, both houses designated their bills "No. 1" for this session of Congress.
Under the House version, Medicare patients would pay a $250 annual deductible and monthly premiums of about $35. The government would then pick up 80 percent of their drug expenses, up to $2,000. Beyond that, there would be no coverage until a patient has used $4,900 worth of drugs in a year. The government would then pay all drug costs for the year above that "catastrophic" threshold.
In the Senate bill, the yearly deductible would be $275, and the premiums would be guaranteed to start at $35 a month. Then, the government would cover half of prescription drug expenses, up to $4,500. It would pay 90 percent of "catastrophic costs" above a $5,800 threshold.
Democrats opposed a key House provision: Starting in 2010, it would require the traditional Medicare program to begin competing directly on price with private health plans. And unlike the Senate bill, the House bill would require patients who use home health services to start paying a fraction of the cost.
Both bills contain two efforts to lower the cost of medicine for all Americans. One would try to increase the availability of lower-priced generic equivalents of brand-name drugs. The other would allow U.S.-made drugs to be imported back from Canada, which regulates pharmaceutical prices, if the Department of Health and Human Services agrees.
As the Senate neared a final vote, Republicans continued to block most Democratic efforts to expand the drug benefit or to cut the costs to consumers. But nearly half the chamber's Democrats joined all Republicans in approving, 71 to 26, a compromise negotiated late Wednesday to divide $12 billion that recently became available for the program. Half that money would be used for five-year demonstration projects, starting in 2009, to make private plans more competitive. The other half would pay for preventive and chronic care services under traditional Medicare.
Democrats failed to win Senate approval for proposals to use the $12 billion to reduce the premiums for the drug benefit or for uninterrupted subsidies for drugs used for certain serious medical conditions.
The Senate approved a proposal by Sen. Mitch McConnell (R-Ky.) to provide expanded drug subsidies for relatively low-income cancer patients. But it rejected a proposal by Sen. Barbara Boxer (D-Calif.) that would have provided such patients broader coverage.
It approved a proposal by Sen. Jeff Bingaman (D-N.M.) to raise from $4,000 to $10,000 the value of assets a person can hold without losing the extra subsidies available to low-income beneficiaries. Bingaman wanted to eliminate the assets test entirely but lacked the votes to do so.
© 2003 The Washington Post Company
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