Medicare Chief Mark McClellan Steps Down

Mark McClellan, who oversaw the biggest change in Medicare since its inception, said Tuesday he is resigning and will probably go to work for a think tank.

No replacement was immediately named, although White House press secretary Tony Snow said McClellan had made it known for some time that he intended to leave.

"He'll be missed by the president and the entire administration," Snow said.

McClellan, a physician and economist, was one of President Bush's economic advisers and served as the Food and Drug Administration commissioner before he was tapped in 2004 to administer the Medicare and Medicaid programs. He had worked in the Clinton administration at the Treasury Department.

His main task over the past year was to get the new Medicare drug program up and running. The program got off to a rocky start, and states had to step in to ensure that the poorest of beneficiaries could continue to get their medicine. Service and care have improved markedly, and analysts say McClellan was responsible for much of the turnaround.

McClellan told The Associated Press he will leave the agency in about five weeks and probably will work for a think tank where he can write about improving health care in the United States.

"My kids don't remember me in a job where I got home regularly for dinner. It's just time," said McClellan, the father of 7-year-old twin girls. "We've gotten a lot accomplished and I'm very confident with the track the agency is on."

As administrator of the Centers for Medicare and Medicaid Services, McClellan oversaw programs serving more than 80 million Americans at a cost of about $570 billion annually. But it was the start of a drug benefit under Medicare that was his biggest priority over the past two years. Under the program, elderly beneficiaries enroll in plans administered by private insurers. Seniors had dozens of plans to pick from, leaving many of them confused and frustrated.

Officials say the program will save the average beneficiary about $1,100. Complaints have dropped significantly, and independent polling shows that most who enroll are satisfied with their coverage.

"We've found and fixed startup problems, we are delivering coverage at a cost at least 25 percent less than had been expected, and we are seeing beneficiary satisfaction rates of over 80 percent," McClellan told his staff in an e-mail Tuesday.

But the drug benefit still is far from error-free. McClellan is to testify before the Senate Finance Committee on Thursday about how 230,000 beneficiaries had their monthly premiums refunded by mistake last month. Sen. Max Baucus, D-Mont., pushed for the hearing, but he gives McClellan high marks.

"Transitioning to the drug benefit has been rocky at times, but he has shown a willingness to go back and fix mistakes so as to make the benefit work for seniors," Baucus said.

McClellan is the brother of former White House press secretary Scott McClellan. His mother, Carole Keeton Strayhorn, is the Texas comptroller and is running for governor as an independent.

Opponents of the administration's health care policies had respect for McClellan. Ron Pollack, executive director of Families USA, called him diligent and thoughtful.

"I think he did the best he could in the context of an administration and Congress that did not make health care a priority and that offered troublesome legislation that would be difficult to implement," Pollack said.

Pollack was referring to the drug benefit, which his organization has said was not user-friendly for beneficiaries, but was friendly to the pharmaceutical and insurance industries. Pollack said he expected the administration to promote somebody from within the Centers for Medicare and Medicaid Services to succeed McClellan because of the difficulty of recruiting during the final two years of a presidency.

In that context, two people with significant managerial experience at CMS include the deputy administrator, Leslie Norwalk, and Herb Kuhn, director of the agency's Center for Medicare Management.