President Bush cajoled conservatives to support a Medicare (search) prescription drug and modernization bill on Wednesday, urging them to overcome their opposition to creation of a costly, new government benefit program.

Bush pledged all the "effort and energy" needed to prevail as House GOP leaders made last-minute changes in an effort to round up enough votes for the measure, which would combine drug coverage with a dose of free-market competition in the government health care program for seniors.

But not everyone was persuaded. Not long after returning to the Capitol from the White House, Rep. Jim DeMint, R-S.C., announced his opposition to the bill, saying it "fails to enact serious reform, but threatens to bankrupt the entire Medicare system. "

Across the Capitol, senators cleared the way for passage of a companion measure, sealing a compromise on an issue that laid bare deep-seated differences between Democrats who favor the existing government-run program and Republicans eager for free-market competition.

Both houses scheduled votes for Thursday on the legislation, which would usher in the most significant changes in Medicare since its creation in the heyday of the Great Society in 1965.

"We're working on it," said House Speaker Dennis Hastert (search), R-Ill., as GOP leaders fielded complaints from lawmakers opposed to proposed cuts in payments to doctors who administer cancer drugs, to reductions in projected spending for hospitals and to a provision imposing higher costs on seniors needing home health care.

At the White House, rebellious Republicans told Bush the bill didn't do enough to control costs in a program facing a wave of baby boom retirements, and that it fell short of his stated goal of injecting competition into the government program, according to one participant.

This participant, who spoke on condition of anonymity, said the president conceded that while the bill didn't give him all he had sought, it was a good first step toward a more private system. At the same time, this source said Bush reminded the lawmakers that he had campaigned for a prescription drug benefit, and added, "We're here to deliver."

Not everyone was persuaded.

Other administration officials joined the lobbying.

Rep. Gil Gutnecht, R-Minn., who favors legalized importation of lower-cost prescription drugs from Canada, sat down to lunch with Health and Human Services Secretary Tommy Thompson (search) in the Capitol. Afterward, Gutnecht said he remained undecided on the bill, adding that Thompson declined to give clearance to a Senate-passed plan to allow Canadian pharmaceuticals into the United States.

After two days of private negotiations, Democrats and Republicans in the Senate reached agreement to spend $12 billion to showcase competing visions for Medicare.

While $6 billion would be spent to test the feasibility of health care plans run by private companies on the basis of competitive bidding, the same amount would establish an experimental program in which traditional Medicare would be expanded to include preventive care and selected other services.

Under both the House and Senate measures, Medicare beneficiaries would receive a new prescription drug benefit beginning in 2006, made available through private insurance companies with government subsidies. In general, an elderly person would be required to pay a monthly premium and satisfy a deductible before coverage would begin. Both bills also include a gap in coverage before benefits resume for recipients with high annual costs.

Both bills create a new alternative to traditional Medicare, with private companies invited to bid for the right to offer services under preferred provider organizations. Both bills also impose higher costs on individuals enrolled in traditional Medicare, raising the annual deductible for doctor and out-of-hospital service as well as fees for some lab tests.

The bills vary widely in their details, particularly in the provisions designed to inject private competition into the 38-year-old program. And in both the House and Senate, conservatives have complained in recent days that the legislation falls short in those areas.

There was considerable conservative opposition to the new benefit.

"I didn't come here (to Congress) to create new entitlements," said Rep. Mike Pence, R-Ind., who was among the lawmakers invited to meet with Bush. "I can't vote for a universal drug benefit."

Republican officials said two dozen or more Republicans were threatening to withhold their support, either on the grounds cited by Pence or because the measure fell short on provisions to introduce free-market competition into Medicare.

Pence and Rep. Nick Smith, R-Mich., both spoke out on the subject at a closed-door meeting of House Republicans, according to participants. Rep. Bill Thomas, R-Calif., a key architect of the bill, sought to reassure critics by pointing to a letter that liberal Sen. Edward M. Kennedy (search), D-Mass., had written denouncing the House measure as a step toward privatization, these sources added, speaking on condition of anonymity.

Republican officials circulated a list of so-called "reform measures" that were part of the bill, pointing in part to a proposal to have some higher-income seniors pay more for drug coverage.

The provision that Kennedy cited — and that many conservatives strongly favor — would end the practice of pegging government Medicare subsidies to the cost of the benefit to be delivered. Instead, beginning in 2010, the legislation would set the federal subsidy for Medicare in part on bids submitted by private insurance companies seeking to offer competing coverage.