GOP Wants Private Competition Within Medicare

WASHINGTON – Conservative Republicans sought greater competition within Medicare on Monday as both houses of Congress pointed toward votes at week's end on bills to create a prescription drug benefit.

President Bush prodded lawmakers to send him legislation swiftly.

Members of Congress enjoy several options when it comes to their own health coverage, Bush told a biotechnology conference. "If the choice idea is good enough for the lawmakers, it ought to be good enough for the seniors of the United States of America," he said.

In the Senate, conservatives led by Sen. John Kyl, R-Ariz., circulated a proposal to plow an additional $6 billion into a plan to allow greater competition in setting the price for coverage under new, managed care plans to be run by private industry.

Officials in both parties said Sen. Edward M. Kennedy, D-Mass., was objecting strongly to acceptance of the proposal unless the same amount of money was allocated for a plan to advance traditional, government-run Medicare.

"What conservative Republicans are now trying to do is rig the system in a way that will coerce seniors away from Medicare and into private plans. This undermines the bipartisan agreement," Kennedy said.

While the amount of money was relatively small -- $12 billion out of a $400 billion 10-year price tag, the ideological considerations were significant.

At its heart, the Medicare legislation represents a trade-off -- a new government benefit program for nearly 40 million Americans that Democrats have long sought, coupled with a new managed care program, designed to compete with traditional Medicare and strongly favored by Republicans.

While key senators grappled with the issue of competition, GOP aides in the House said leaders were struggling to reassure conservatives there, as well. There, these officials said, the concern was that the bill that clears the House would lose some of its free-market emphasis when a final compromise was reached with the more moderate Senate measure.

"Some people would like a lot of reform. Some people would like a little reform. The notion that we could get through by satisfying everyone is not realistic," said Sen. Mitch McConnell, R-Ky., the Senate GOP whip.

McConnell predicted approval of the Senate bill by a solid bipartisan margin by the end of the week, and other officials said the size of the vote behind the measure would hinge in part on the resolution of the dispute surrounding the $12 billion.

The vote is expected to be considerably more partisan in the House, where Republicans drafted legislation with little if any consultation with Democrats, who are expected to oppose the bill in large numbers.

The GOP leadership has considerable leeway in making changes in the House measure before it is brought to the floor for a relatively brief debate and series of votes.

In contrast, the Senate debate entered its second week during the day, with Democrats continuing to press a series of proposed changes to sweeten the benefits and eliminate a gap in coverage between $4,500 and $5,800.

Beyond that, Sen. Lincoln Chafee, R-R.I., said he was likely to propose a change that would gradually push back the age of eligibility of Medicare from 65 to 67.

"I feel strongly that we should try to pay for this new benefit," he said.

Chafee noted that the full retirement age for Social Security benefits is rising gradually from 65 over several years. Workers born in 1960 and later will have to wait until age 67 to receive their full retirement benefits.

Bush has made a series of public pleadings for Congress to enact prescription drug legislation in recent days, as he and fellow Republicans reach for a legislative achievement on an issue that has long favored Democrats.

"When the government determines which drugs are covered by health insurance and which illnesses are treated, patients face delays and inflexible limits on coverage. That is a fact. Medicine works best when doctors and their patients decide what treatments to pursue," he said.

Under the legislation pending in the Senate, the government's subsidy for premiums offered by new preferred provider organizations would be based in part on the subsidy for traditional Medicare. Under Kyl's proposal, that would change, and it would be based entirely on bids submitted by PPOs selected to offer coverage.

Republicans view that as an attempt to nurture competition within Medicare, while Democrats view it as an attempt to move toward privatization.

Kennedy' s role in the run-up to a final vote could be pivotal, since he gave the overall legislation a boost more than two weeks ago at a time when other Democrats were sharply critical of it.