Bush: Prescription Plan Won't Privatize Medicare

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After an earlier prescription drug plan was snubbed by members of his own party, President Bush outlined guidelines for a new plan Tuesday.

"Our vision, our goal is a system in which all Americans have got a good insurance policy, in which all Americans can choose their own doctor, in which seniors and low-income citizens receive the help they need, in which — the system is one in which the patient-doctor relationship is the center of good medical care," Bush told the American Medical Association.

"This vision stands in stark contrast to the government-run health care ideas, the ideas in which the federal government decides care, the federal government rations care, the federal government dictates coverage. A vision, which, in my judgment, will stifle innovation, stifle quality and run up the costs on the patients of America," he said.

The president's "framework" offers three opportunities for seniors. The first would allow seniors to stay in the current system and receive help for prescription drugs through a 10 to 25 percent discount card. An annual $600 subsidy would be given to low-income seniors to pay for prescription drugs.

The president also offered seniors who want more coverage to pay a fee-for-service arrangement that lets seniors pick their own specialists, hospitals and primary doctors, imitative of a preferred provider option available through private insurers. The president said that plan would offer full coverage for preventative care, a comprehensive prescription drug benefit, protection against high out-of-pocket costs, and extra help for low-income seniors to be able to get the drug benefit.

"The fee-for-service arrangement would offer seniors similar kinds of choices now enjoyed by the members of Congress, who are given a broad choice among competing health care plans. What is good for the public servants, including members of the House and Senate, is good for America's seniors," Bush said.

The third option would create a managed care plan that also provides a prescription drug plan and creates a network of doctors and pharmacies while minimizing out-of-pocket costs.

Even Republicans, however, said the president is thinking too ambitiously.

"The way I see it, we need a universal drug benefit so seniors who want to stay in traditional Medicare get a prescription drug plan that's just as good as those who chose a new option," said Senate Finance Committee Chairman Chuck Grassley, R-Iowa.

House Energy and Commerce Committee Chairman Billy Tauzin, R-La., analyzed the situation with a terse comment about his mother: "You couldn't drive her out of Medicare with a bulldozer." He said the plan his panel will write will have a traditional Medicare drug benefit that is "as strong if not the same as private market plans."

Several lawmakers targeted the president's last option, saying that a managed care option won't work in an era when HMOs are abandoning Medicare. Citing high costs, 33 health plans withdrew from the program this year or reduced their services, dropping coverage for nearly 200,000 people.

"I am concerned that under this plan, if the private, HMO and preferred provider options don't succeed, seniors will not have any fallback available under the traditional fee-for-service Medicare program, as they do today," said Sen. Olympia Snowe, R-Maine. "Every senior should have access to comprehensive prescription drug coverage, regardless of which Medicare option they choose."

"They're going to force seniors to give up the doctors they choose for the drugs they need. That is a false choice," said Senate Minority Leader Tom Daschle, D-S.D.

On a day when Congress was considering medical malpractice limits and liability issues and military veterans descended on Washington to push for better access to veterans hospitals, House Democrats offered their competing version for a prescription drug benefit.

"You pay $25 a month, you get 80 percent of your prescription pharmaceuticals paid for by the government and you pay 20 percent of the cost yourself — very simple, very understandable, very plain. The same as Medicare is now," said Rep. John Dingell, D-Mich., who authored the plan, which failed last year in the House by a 221-208 margin.

Under the plan, seniors would also pay a $100 yearly deductible, and there would be a $2,000 limit each year on out-of-pocket costs for beneficiaries, a Democratic aide said. The poorest seniors would have their costs subsidized by the government.

Dingell added that since 40 million seniors are planning on spending $1.8 trillion over the next decade on drugs, the government should attempt to use its measurable bargaining power to bring down prices.

"This is not price controls; it is competition and bargaining. Plus, there are pro-consumer provisions to lower drug prices through increased pharmaceutical competition and access to generic drugs," Dingell said.

At least one labor group was quick to back the Democrats.

"The House Democratic prescription drug plan truly modernizes Medicare by filling a real need and preserving freedom of choice for seniors," Sandra Feldman, president of the American Federation of Teachers, wrote in a letter to House Minority Leader Nancy Pelosi, D-Calif. "It stands in stark contrast to so-called Medicare reform proposals that would force the elderly to leave the existing Medicare program and join expensive HMOs or other forms of managed care in order to get prescription drug coverage."

Aides to House Speaker Dennis Hastert say he will work to beef up the traditional Medicare portion of the prescription drug plan, denying that he has done anything but embrace the president's proposal.

Bush said that his efforts to create competition in the private industry are not a means to privatize Medicare but to give people better care at a lower cost.

"When insurance providers compete for a patient's business, they offer new treatments and services quickly. If they don't, the patient, the customer, will look for better services elsewhere," he warned.

Medicare enrollment is expected to double in the next 30 years. The president has budgeted $40 billion a year for the next decade for his reforms. House Democrats want to spend twice that, despite the budget deficits the country faces, saying the money could come from preventing the president's proposed tax cuts.

"I feel a whole hell of a lot more obligation to provide a pharmaceutical benefit to people my age than to see that my kids get rich without paying any taxes," said Rep. Pete Stark, D-Calif.

Senate Democrats fall between the two plans, but lawmakers may never be able to agree on a plan.

Senate Majority Leader Bill Frist, R-Tenn., a close Bush ally, appeared at the AMA meeting before the president and indicated that senators will produce their own bill.

"The Senate is going to go through the Finance Committee," Frist said, apparently conscious of Daschle's warning that the president's plan may not be "dead on arrival" but has "very little chance of survival."

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