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Jewish World Review May 17, 2001 / 24 Iyar 5761

Morton Kondracke

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Consumer Reports

Medicare fight may revive DOA Bush plan -- INITIALLY dismissed as dead on arrival, President Bush's plan for a state-based prescription drug benefit could be revived before the 2002 Congressional elections.

The $46 billion, five-year "immediate helping hand" proposal for low-income seniors could re-emerge if, as seems likely, more ambitious Republican plans for full-scale Medicare reform get bogged down in partisan warfare.

Along with tax cuts, the budget, trade and energy, Medicare is likely to be one of the most contentious issues of the 107th Congress -- and one of the most political. Seniors are a key swing voting group that has been leaning Republican in recent elections, though most seniors supported Democrat Al Gore in 2000.

Democrats and Republicans differ profoundly on practically everything about the system except the facts that it is destined to go broke and that seniors want a drug benefit.

Just after taking office, Bush proposed "Helping Hand" as an interim program while full-scale Medicare reform was put into place.

It was immediately written off as dead by both parties and by analysts because governors -- even Republicans -- don't want the responsibility of running it and because it seemed Congress would want the credit for giving seniors a federal drug benefit.

However, it may be impossible for Republicans to push a market-based overhaul of Medicare through Congress -- particularly the Senate -- before the next election.

Ways and Means Chairman Bill Thomas, R-Calif., wants to bring a Medicare reform-drug bill to the floor before the August recess.

He's proved adept at getting what he wants, but his aim is complicated by a demand from Energy and Commerce Chairman Billy Tauzin, R-La., for jurisdiction over parts of Medicare.

In the Senate, Finance Chairman Chuck Grassley, R-Iowa, also wants to pass a reform bill this year, and committee members John Breaux, D-La., and Bill Frist, R-Tenn., are refining measures they've introduced in the past.

However, passing a Medicare bill will require 60 votes in the Senate, and mainline Democrats and Republicans differ on money, coverage and philosophy -- that is, on practically everything.

Democrats favor a stand-alone prescription drug benefit costing $500 billion over 10 years that would pay 50 percent of all seniors' drug costs regardless of their incomes.

Bush's budget contains just $156 billion spread out over 10 years for Medicare reform, including Helping Hand. He is also planning to spend an unspecified sum from an $860 billion "contingency fund" that is also supposed to pay for defense increases, emergencies and Social Security reform.

Under the so-called Breaux-Frist II bill that Bush favors, all seniors would have the option to get a Medicare drug benefit, but subsidies would be available only to lower-income seniors.

The biggest disagreement of all is over Medicare reform. Democrats fundamentally want to keep the system as it is and add money to it. Republicans (and Breaux) consider it a bureaucratic relic that has to be reformed.

They point out that the agency administering Medicare, the Health Care Finance Administration, has 130,000 pages of regulations -- four times the bulk of the Internal Revenue Code.

HCFA can take up to five years to decide whether to pay for a new medical device, and it sets 11,000 reimbursement rates for various medical procedures in the nation's 8,000 counties.

Doctors can't ask patients to pay more than HCFA allows, so many won't see Medicare patients. To see a physical therapist requires a visit to a physician's office -- verified by a bill -- and additional expensive visits to keep therapy going. Phone call consultations aren't allowed.

If a prescription drug benefit is added to the existing system, Bush administration officials say, HCFA and Congress would micromanage medicine, deciding which drugs are covered and how much should be charged for them.

The Breaux-Frist proposal gives seniors the choice of sticking with the existing Medicare plan or choosing among private insurance plans, as federal employees under the Federal Employee Health Benefits System do.

But Democrats contend that private insurers won't cover seniors -- who tend to require medical treatment more often than under-65 citizens -- without exorbitant subsidies, or "bribes."

There's also a vast difference between parties over how to contain drug costs. Republicans oppose government price controls and want competing private entities to bargain with drug companies on behalf of seniors.

Although Democrats do not advocate direct government price controls, Republicans and the pharmaceutical industry say that would be the effect of Democratic proposals. Democrats accuse the GOP of putting the interests of drug companies ahead of those of seniors.

The vast differences probably will block comprehensive reform in this Congress, creating pressure among Republicans to present some achievement to senior voters.

One alternative is a drug benefit with modest -- or even cosmetic -- reform. That would constitute a Democratic victory.

The other alternative is the Helping Hand proposal. Democrats would resist it, possibly preventing it from passing. But at least Republicans could go into the next election saying they tried to accomplish something.

JWR contributor Morton Kondracke is executive editor of Roll Call, the newspaper of Capitol Hill. Send your comments by clicking here.

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