Healthy Skepticism Library item: 1481

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Hallam K.
Bush, Retirees, Insurers Push for Medicare Measure
Bloomberg 2003 Nov 13

Full text:

President George W. Bush stepped up pressure on Congress to pass $400 billion Medicare legislation while stopping short of an explicit endorsement of a plan to break a stalemate on prescription-drug benefits for seniors.

Bush sent his deputies to five cities in a nationwide effort to persuade House and Senate lawmakers to pass a Medicare measure by the end of the year. A proposed compromise, backed in principle by some key Democrats, would allow private insurers to compete with Medicare to cover elderly and disabled patients.

``We must not miss this opportunity,’‘ Bush said at a seniors’ center in Orlando, Florida. He’s also raising more than $2.5 million for his 2004 re-election campaign in the state.

The $400 billion legislation under discussion would more than double Medicare’s spending on its 41 million elderly and disabled patients in the next decade by increasing drug coverage and raising reimbursements for hospitals in rural areas.

AAHP/HIAA plans to push Republicans to support the broadest expansion in the federal health-insurance program’s history. The first meeting in two months of all 17 Republican and Democratic negotiators charged with reaching a compromise is tentatively scheduled for Tuesday, a congressional aide told reporters.

``For us, the essence of the bill is to get it done now,’‘ said Mohit Ghose, a spokesman for the AAHP/HIAA, a trade group that represents insurers including UnitedHealth Group Inc. and Cigna Corp.

Expanding Medicare’s prescription-medicine benefit may help drugmakers such as Pfizer Inc. and Mylan Laboratories Inc. and pharmacy-benefit managers such as AdvancePCS and Express Scripts Inc. Drugmakers’ shares rose as Bush spoke. The Standard and Poor’s 500 Pharmaceuticals Index added 3.1 percent.

Hospital operators such as Health Management Associates Inc. would also benefit. Members of AARP, which represents 35 million Americans ages 50 and older, gathered in Cleveland and Dallas to listen to Bush’s speech, said AARP spokesman Steve Hahn.

Bush made a 2000 campaign promise to help the elderly afford prescription drugs. House and Senate lawmakers have struggled for three months to merge their versions of legislation to revamp the federal health insurance program for the elderly and disabled.

Medicare is ``a basic trust’‘ for seniors, Bush said. He urged elderly listeners to ``speak up’‘ for passage of a prescription-drug benefit.

Bush isn’t endorsing any proposal at this time, White House spokesman Trent Duffy said.

``He is very pleased with the progress Congress is making’‘ on the measure, yet the details ``are still to be worked out,’‘ said Duffy, who traveled with Bush to Florida.

The Congressional Budget Office and the White House Office of Management and Budget will have to estimate the costs of the measure, he said. The White House supported earlier versions of the measure that were passed by the House and Senate, he said.

House Republican leaders sought support for the compromise from about 400 corporate lobbyists yesterday, including those representing Cigna, Caterpillar Inc., as well as industry groups AAHP/HIAA and the Pharmaceutical Research and Manufacturers of America, said Jessica Boulanger, a spokeswoman for House Majority Whip Roy Blunt, a Missouri Republican.

Senators John Breaux and Max Baucus, the only two Democrats invited to negotiate with Republicans on the Medicare plan, said they tentatively support the Republican leadership plan designed to break the logjam.

The Louisiana Democrat said Republicans are concerned that the competition provision be strong enough to cut health costs.

Democrats don’t want the provision to encompass all seniors, Breaux said. A compromise ``is very doable,’‘ Breaux said.

Senate Majority Leader Bill Frist and House Speaker Dennis Hastert helped craft the plan, which includes elements of three Republican priorities: direct competition between Medicare and private insurers such as UnitedHealth, cost controls and allowing Americans to set up private saving accounts for medical expenses.

The agreement would test competition in four metropolitan areas and one region of the country for at least three years, starting in 2008. Premiums for Medicare coverage in those areas would be linked to bids from private health plans.

Any premium increases as a result would be limited to 10 percent a year and low-income seniors who remain in the traditional Medicare program would be exempt from the higher charges. To control costs, Congress would be required to discuss reining in Medicare costs if the program draws 45 percent or more of its funding from general tax revenue.

The agreement also drew criticism from Senate Democrats. Bob Graham of Florida said he won’t support the tentative compromise, in part because he thinks many retirees with prescription-drug coverage will lose employer-provided insurance once the government steps in.

``There will be an incentive for employers to drop the prescription-drug coverage for their retirees,’‘ he told reporters in a conference call.

Minority Leader Thomas Daschle of South Dakota and Senator Edward Kennedy of Massachusetts said the proposal would force 10 million seniors into health maintenance organizations and raise the premiums for the other 31 million seniors.

``Senior citizens will be the big losers if we accept the Republican plan to privatize Medicare and turn it over to the tender mercy of HMOs and the private insurance company,’‘ Kennedy said at a press conference in the Capitol. Families USA, the National Committee to Preserve Social Security and Medicare, and the Alliance for Retired Americans joined Kennedy.

``If they really care about Medicare, they’ll go back to the table’‘ for more talks, said Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.

Senator John Kerry, who is running for the Democratic presidential nomination, said the proposal would undermine the existing Medicare program and raise patient costs.

``Hard-pressed seniors need a real affordable prescription- drug benefit that puts them ahead of the multibillion dollar drug companies that fund George Bush’s campaign,’‘ Kerry said in a statement. ``This is the wrong prescription.’‘