Conservatives Balk at Medicare Reform Costs

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Forty-four House Republicans have threatened to torpedo President Bush's coveted Medicare prescription drug plan (search) if it does not include free-market reforms.

They say the drug benefits will cost too much and drive Medicare ever closer to insolvency. The Congressional Budget Office (search) has estimated the bill will cost $400 billion over 10 years.

Opponents of the measure say free-market reforms are less aggressive than they would have preferred but at least offer some hope of keeping overall Medicare costs under control. Free-market health analysts agree.

"It's not clear how expensive it's going to be, and it's going to further aggravate the long-term liability of Medicare, and will require huge tax increases in the future on our children and children's children to pay for this benefit," said Michael Franc, an expert on congressional procedure at the Heritage Foundation.

The House GOP uprising threatens the president's top legislative priority for the year and a key part of his strategy to rack up domestic policy victories in advance of his bid for re-election.

"The Medicare system of today does not have prescription drug benefits, as you know. We've got to change that. If medicine is changing, we want Medicare to change with it, on behalf of the senior citizens all across the country," Bush said Monday in a speech to seniors in Miami.

But conservatives fret the program will be too expensive and predict that once the government subsidizes drug coverage, demand will increase and costs will exceed expectations.

The Medicare bill passed by one nod in late-night voting last week in the House. Afterward, the 44 House Republicans, including many who had voted for the bill, wrote a letter to House Speaker Dennis Hastert, R-Ill. (search), vowing to kill the final Medicare drug bill package to be negotiated with the Senate unless it contains language creating free-market competition.

"Should this reform be removed or weakened, we cannot as a matter of responsible public policy support a bill to add a prescription drug benefit to Medicare which would accelerate the insolvency of this vital program," the letter read.

The renegade Republicans say they want to give Medicare recipients the chance to buy alternative health coverage outside of Medicare starting in 2010. The idea is to give seniors the same medical coverage options members of Congress now enjoy.

"It's an absolutely critical issue and it is a make or break for many of us, because the fact is, in its current form, Medicare is on the road to bankruptcy. We need to make some substantive reforms," said Rep. Pat Toomey, R-Pa. (search), one of the letter's signatories.

Free-market supporters add that Medicare prescription drug supporters have not worked hard enough to keep costs down, a symptom of what they say is recklessness toward federal spending.

"I mean there's nothing they won't spend money on," said Ed Crane, president of the CATO Institute. "Billions of dollars on farm subsidies, a $400 billion prescription drug benefit on top of a collapsing Medicare system. There's been no financial discipline in this administration whatsoever."

The Senate version of the measure does not contain free-market competition provisions. A bill reconciled between the House and Senate must pass both chambers before heading to the president's desk.

Democratic Sen. Ted Kennedy (search) of Massachusetts, who along with 75 others voted for the Senate bill, opposes free-market reforms, and is banking on getting his way in the final analysis.

"[Kennedy] said recently that if you are opposed to privatizing any aspect of the Medicare program, you should vote for this bill. That was his way of saying that he has been guaranteed that the private options in this proposal are going to fail," the Heritage Foundation's Franc said.

The White House will have to choose between Kennedy and House Republicans since it can't have both, but that may result in no Medicare reform at all.

Fox News' Major Garrett contributed to this report.