Bush Signs Sweeping Medicare Bill

Recognizing the efforts by seniors groups in helping him deliver a three-year-old campaign promise, President Bush signed a comprehensive bill Monday that marks the first major overhaul of the nearly 40-year-old federal Medicare program.

"With the Medicare Act of 2003 (search), our government is finally bringing prescription drug coverage to the seniors of America," Bush said before signing the 10-year, $395 billion legislation. "With this law, we're giving older Americans better choices and more control over their health care so they can receive the modern medical care they deserve."

Bush signed the bill in front of an audience of seniors and congressional leaders in the Daughters of the American Revolution's Constitution Hall (search). He spoke in front of a large blue banner with a prescription sign and the words: "Keeping Our Promise to Seniors."

"This bill happened because of grassroots work. A lot of our fellow citizens took it upon themselves to agitate for change, to lobby on behalf of what's right," Bush said. The groups that speak for the elderly did fantastic work on this legislation. See, there was a lot of pressure not to get something done -- for the wrong reasons, I might add."

Bush thanked the AARP, the 60-Plus Association, the United Seniors Association, The Seniors Coalition and the American Medical Association for lobbying on behalf of the bill, even though some groups, particularly the AARP, have experienced a revolt by some seniors who complain that the package is nothing but a boondoggle for the insurance companies.

Others, including several Democrats, have stepped up their criticism of the legislation that barely passed the House of Representatives after a nearly three-hour voting session and overcame a Senate filibuster threat.

"This bill is not the elixir for saving Medicare -- it is, rather, a poison pill that leads to the destruction of the Medicare program as John F. Kennedy and Lyndon Johnson envisioned it.  This bill was crafted of the special interests, by the special interests and for the special interests, and should not stand," said Rep. Ed Markey, D-Mass.

The bill adds prescription drug coverage to the program, which will not begin until 2006. Until then, seniors will be eligible to purchase a Medicare-backed discount drug card at an estimated cost of $30 a year. The administration says this will shave off between 15 percent and 25 percent from retail prices.

"This legislation will provide seniors with more benefits and better choices so they have more control over their health care and receive the modern care they deserve," White House spokesman Scott McClellan (search) said Monday. "Seniors have waited far too long for prescription drug coverage … we made a commitment ... and we are keeping that commitment."

Bush said President Lyndon Johnson (search), when he signed the Medicare Act of 1965, established a "a solemn promise to America's seniors. We have pledged to help our citizens find affordable medical care in the later years of life.

"And today, by reforming and modernizing this vital program, we are honoring the commitments of Medicare to all our seniors," Bush said.

The bill lets seniors choose the level of insurance coverage that matches their physical needs and financial situations. Drug costs will need to be more than $100 per month for the benefit to be worth buying, and buying it will effectively place a $300 per month cap on drug costs.

They can also establish tax-free health savings accounts of up to $4,500, which helps those whose health expenses are predictable.

Complaining about the massive and unfunded price tag on the bill, Democrats say pilot programs meant to tweak the Medicare system will add to the cost of the new legislation.

Among those programs is a $500 million two-year, six-state effort for at least 50,000 patients to cover a limited category of self-administered prescription drugs (search).

"No less than 40 percent of the funding shall be for oral cancer," Congress directed in a report accompanying the bill.

Other programs are designed to help health care providers and their patients, including a two-year program to cover chiropractic services without prior approval by a medical doctor.

Still others are aimed at attacking waste, such as a three-year provision to allow Medicare to contract with private firms for "identifying underpayments and overpayments and recouping overpayments."

Beginning in 2010, the bill starts a six-year program that encourages insurance companies to offer private plans to millions of older Americans who now receive health care benefits under terms fixed by the government. Six states will participate in the plan, but critics of the bill have lobbied to have their states exempted from the test for fear the program will force seniors to pay higher premiums

Republicans say the provisions will maintain a healthy health care system, including providing money to help rural health care clinics stay open, tax benefits to encourage companies to continue insuring their workers and insurance companies to keep their Medicare patients.

But Democrats consider those incentives as giveaways that will do nothing to stop to insurers from dropping clients.

Democrats also note that the law bans new Medigap policies that would allow all drug costs to be covered and bans drug re-importation from Canada.

Markey, along with several House Democratic lawmakers, has called for the repeal of a provision that does not allow Medicare to bargain collectively for lower drug prices.

"It was not in the bill because pharmaceutical companies insisted that it stayed out. How can we face America's seniors who are crying out for lower pharmaceutical prices and say in the bill that the government is prohibited from negotiating for lowest prices?" said House Democratic leader Nancy Pelosi (search) of California, who joined Sen. Edward M. Kennedy (search), D-Mass., and other opponents at a rally with seniors on Monday.

The pilot program for background checks at long-term care facilities is designed to reduce patient abuse and is a longtime interest of Sen. Herb Kohl, D-Wis. At a two-year cost of $25 million, it sets up programs in up to 10 states for checks on workers who come in direct contact with patients.

Prospective employees will be required to submit fingerprints to the facilities, which will work with states to check them against an FBI database.

"Disqualifying information for employment includes information about a conviction for a relevant crime, a finding of patient or resident abuse or a felony conviction related to health care fraud or a controlled substance," said the report accompanying the bill.

Officials said the five-year program for rural hospice care stemmed from an issue raised by Mississippi's Republican senators, Thad Cochran and Trent Lott. That program will make it easier for rural, terminally ill Medicare recipients who live far from hospice facilities to receive more care.

Fox News' Wendell Goler and the Associated Press contributed to this report.