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Analysis: Is Bush Medicare plan enough?

By ELLEN BECK

WASHINGTON, Jan. 29 (UPI) -- President Bush's proposal for $190 billion in additional Medicare spending -- not specifically mentioned in his State of the Union address -- is drawing praise and skepticism.

There is praise for the administration's commitment to the senior health care program, but skepticism that the additional spending is enough money to make progress on long-term reform or to add a prescription drug benefit.

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Karen Ignagni, president of the American Association of Health Plans in Washington, told United Press International that after spending Tuesday talking with people from both political parties, the overriding sentiment is they recognize "there has to be a start on this (Medicare) program and on this (Medicare) problem."

Robert Hayes, of the Medicare Rights Center in New York, agreed Bush recognizes the need for more money.

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"But too much of the president's plan is more the appearance of progress rather than true progress," Hayes told UPI. "The president is clearly taking a baby step in that direction. No realistic person is thinking anything less than $300 billion is reasonable."

In his Tuesday night address, Bush barely gave Medicare a passing mention in a speech dominated by America's war on terrorism, which did not bode well for those hoping for a stronger emphasis.

"Americans know economic security can vanish in an instant without health security. I ask Congress to join me this year to enact a Patients' Bill of Rights to give uninsured workers credits to help buy health coverage, to approve an historic increase in spending for veterans' health and to give seniors a sound and modern Medicare system that includes coverage for prescription drugs," Bush said.

Max Richtman of the National Committee to Preserve and Sustain Medicare told UPI after the speech he was disappointed.

"As the second largest senior group in the country, we're disappointed that the improvements we were hoping for, they were mentioned in his speech, but they were very far down the list of priorities compared to where they were in the campaign last year and even at the beginning of 2001," he said.

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"I was a little surprised, I thought there would be more than one sentence," said Dennis Olmstead, a Medicare expert and chief economist for the Pennsylvania Medical Society, in a telephone interview from Harrisburg.

Bush earlier had released details of his proposal -- $190 billion in additional spending for Medicare in the fiscal 2003 budget, on top of the more than $220 billion in regular spending -- noting reform and a general prescription drug benefit for all seniors will take several years to realize.

The problems with Medicare, which provides health care to 39 million seniors now and is expected to cover 77 million by 2030, are not new. For a decade, dire predictions of insolvency have haunted Capitol Hill.

Medicare's Hospital Trust Fund -- Part A, covering inpatient hospital services -- is predicted to run out of money by 2029 unless Congress makes changes to bring in more revenue. Medicare Part B, which covers just about everything else Medicare provides, is funded by beneficiary premiums and general fund revenues. To hold down spending there, as well, many experts say seniors will have to pay higher premiums and deductibles -- perhaps double -- in the coming decade.

There is talk about reform but little agreement on just what it would entail, and neither Democrats nor Republicans have been able to pass legislation that would raise the age for getting into the program, reduce benefits to save money, force seniors into HMOs, raise the payroll tax that funds the Trust Fund or any other of the tough choices all agree may be necessary to keep Medicare solvent. There also is no agreement on how a prescription drug benefit should be melded into the program.

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What Bush proposes instead -- in a term already saddled with the war on terrorism, homeland security and economic stimulus funding -- is to push for reform overall but bring in some stopgap elements more quickly than a protracted political debate will allow.

Hayes, a lawyer, said while there is no evidence to support optimism that Medicare reform will pass this year, there is a sense of communal spirit stemming from the events of Sept. 11 that may hold out a ray of hope.

"If there can be a popular appreciation that the debate over healthcare determines whether our parents can get medicines the doctor prescribes, I think Congress will act," he said.

Health and Human Services Secretary Tommy Thompson, after a meeting with Bush to review the proposal on Monday, told reporters even though Congress had authorized $300 billion, the $190 billion "as you know, was what the president ended up with last year, and that's what he's starting with."

"I think you got to give the administration a lot of credit, especially now, with the war going on, and the recession, that we are still fighting very hard, and we want this, as a number -- as a strong priority for this administration, to get Medicare reform through. And $190 billion is what we think we can get the job done with," Thompson said.

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Bush wants $77 billion to allow states to use their Medicaid programs for the indigent to provide prescription drug coverage to seniors with incomes up to 150 percent of the federal poverty level -- $17,000 for a family of two. It calls for a 90-10 match of state spending. Some 3 million additional seniors could get prescription drug assistance this way.

Eighteen states so far are funding their own programs and would be eligible for the 90 percent match, Thompson said.

He said HHS, through Pharmacy Plus, would offer quick waivers for states to implement such prescription drug programs. Waivers are required when a state wants to change its Medicaid program and Thompson, as governor of Wisconsin, was a very vocal critic of what has been a slow and complicated process.

William Novelli, chief executive officer of the seniors' group AARP, said in a statement $190 billion was "insufficient and we will continue to urge the president and Congress to allocate sufficient funding to implement a meaningful and affordable drug benefit in Medicare."

Novelli said the state match program was "an improvement" over the administration's plan last year, "Helping Hand" that offered block grants to states to help seniors purchase prescription drugs.

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"I think part of the problem is that many of the states have a budget shortfall," Olmstead said, adding that reduces the amount of money they have to spend on federal matching programs, which could throw a wrench into the prescription drug plan. "That's going to be a problem," he told UPI.

The administration also is taking a stab at shoring up the financially desperate Medicare+Choice program, which allows seniors to join HMOs that provide all of the benefits of the traditional Medicare package and often some extras -- most notably prescription drug coverage.

The program has been losing plans by the hundreds and members by the millions over the past few years as insurers have dropped out or reduced coverage because the government payment is too low for them to operate profitably. The Bush plan would increase Medicare+Choice payments to insurers by 6.5 percent.

"As all of you know, we have not been able to increase the Medicare Plus over 2 percent since 1998," Thompson said.

"I think he is giving this program a lifeline," Ignagni told UPI. "And I think what you'll hear around the country is very positive reactions from beneficiaries who realize, that at a time when the budget is tight, he (Bush) realizes their dependence on this program."

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Hayes disagreed, and said a plan to increase Medicare+Choice funding to "throw billions of dollars to bolster up a failed experiment is a bad investment."

There are only about 5 million seniors in Medicare+Choice and experts agree that without financial help, the program likely would die within a few years.

Thompson said the drug discount card option proffered by the administration last year and now locked up in the courts is still part of the overall plan. The Medicare Rx Drug Card Program would provide pharmacy discounts -- possibly up to 25 percent -- via manufacturer rebates, resulting in lower prices.

Bush's proposal also would revamp the Medigap supplemental coverage program that pays what Medicare does not cover. While Medigap is offered by private health care plans, the government sets the coverage requirements each plan must offer.

"Anybody who is looking at it (Bush's proposal) objectively would say, I think it is too little, too late," Richtman said. "The bulk wouldn't start until 2006, assuming the budget is back in balance and if it is not, I wonder if that would be pushed back even further. Better than nothing, but overall too little and much too late."

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