Little Progress In Medicare Talks

July 28, 2004
Despite a pep talk by President Bush last week, Senate and House conferees are moving at a snail's pace in reconciling fundamentally different Senate and House bills to provide prescription drug coverage to Medicare beneficiaries. In fact, while the bills share many common elements, they approach the problem of providing medical care and prescription drug benefits to the elderly in two entirely different ways.

"This is a classic dispute between the two great philosophies of the country," said Rep. W.J. "Billy" Tauzin (R-La.), one of the conferees. "(Some) people philosophically believe in the government making all the choices, or they believe in competition."

The Senate bill maintains the basic structure of Medicare as a single-payer, fee-for-service system while the House bill seeks to inject competition among private insurers into the equation.

The conference committee last week reached agreement on a section involving the program's regulations and the House passed a bill that would allow drugs to be re-imported from Canada and Europe. House members left town Thursday for the August break, which extends through Labor Day. The Senate will follow this week.

President Bush is still pushing for a final bill in September. Some members of the conference committee are predicting agreement will not come until later in the year. And many veteran observers are predicting that no agreement will be reached. With the 2004 elections approaching and the federal deficit growing larger by the day, this is most likely the last chance for substantial changes in the program.

At his meeting with the conferees last week, Bush confined himself to general remarks characterized by attendees as a pep talk. "This was not Clinton," said one. Former President Clinton was unusual in his appetite and capacity for the details of complex legislation.

Health and Human Services Secretary Tommy G. Thompson, however, issued a detailed analysis that predicted seniors without coverage would see their drug bills cut in half under the House bill.

But the Congressional Budget Office said older Americans are unlikely to sign up for private health plans. The analysis by the nonpartisan budget office says that, despite efforts in both the House and Senate bills to create popular private-sector alternatives to the traditional Medicare program, the proportion of elderly patients in such health plans would be lower in a decade than it is today.

That conclusion is accompanied by a forecast that each bill would cost more than the $400 billion limit agreed to by lawmakers and the White House for spending to redesign Medicare. According to the analysis, the Senate measure would cost $461 billion in direct spending over the next decade, and the House version would cost $408 billion.

Common Ground

The competing bills share these characteristics:

• They would offer prescription drug coverage to everyone covered by Medicare;
• They would encourage older Americans to sign up for preferred-provider plans, health maintenance organizations or other private alternatives to the present fee-for-service program.

Fightin' Words

The list of issues on which there is marked disagreement is much longer:

• Opening the Medicare market to competition by private insurers (House);
• Requiring more affluent elders to pay more for their prescriptions (House);
• Promising prescription drug coverage in all areas of the country, including those where private insurance is not available (Senate);
• Differences over the size of the gap in drug coverage between the basic benefit and catastrophic coverage.