Congress Wary of Bush Medicare Drug Plan

WASHINGTON – In the month following President Bush's State of the Union address, his allies in Congress have shown little enthusiasm for his proposal to require older people to join HMOs or other private insurance plans in order to gain prescription drug benefits.

In the speech, Bush broached the idea of giving Medicare recipients an option to get government assistance for pharmaceutical costs, saying that "seniors should have the choice of a health care plan that provides prescription drugs."

Immediately afterward, Senate Finance Committee Chairman Charles Grassley, R-Iowa, said he would refuse to "draw lines on drug coverage." Sen. Olympia Snowe, R-Maine, accused Bush of "hampering" efforts by her and other lawmakers to get such benefits for all older Americans. Senior House Republicans expressed only befuddlement.

Since then, White House officials have been reluctant to provide any details.

Lawmakers in both parties remain anxious to pass a Medicare prescription-drug benefit, particularly before the 2004 elections. In 2002, the House passed a $350 billion, 10-year plan that, like Bush's, relied heavily on private insurers — a concept that Democrats vehemently oppose. It died in the then-Democratic-led Senate.

"It's exactly the opposite of what seniors want and need," Senate minority leader Tom Daschle, D-S.D., said recently.

Medicare's HMO program signed up many older people when it began in 1999 because it offered enhanced benefits such as drug, dental and hearing coverage, which were not covered by traditional Medicare.

Since then, many managed-care plans have fled high-risk areas and abandoned beneficiaries, complaining about low profits and rising health-care costs. Just this year, 33 health plans withdrew from the Medicare program or reduced their service, dropping coverage for nearly 200,000 people.

Between 1999 and 2001, nearly half the HMOs participating in the program withdrew or scaled back their services, affecting some 1.6 million Medicare recipients, according to a study last year by Mathematica Policy Research, Inc.

About 5 million of Medicare's 40 million beneficiaries are still enrolled in the HMO program.

Karen Ignani, president of the American Association of Health Plans, said the private plans were having difficulties because the "funding formula hasn't kept pace with the increase of health-care costs."

"Plans have been forced out because Congress hasn't done its part to fix the formula glitch," Ignani said. "Only in Washington do entities get underfunded and then get blamed."

The Associated Press contributed to this report.