Analysis: Medicare deal faces tough road

By ELLEN BECK, United Press International  |  Nov. 17, 2003 at 4:28 PM
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WASHINGTON, Nov. 17 (UPI) -- The legislative compromise reached over the weekend on Medicare prescription drug coverage is not an overwhelming hit with either Democrats or Republicans and the bill's true deal makers or breakers just might be senior citizens.

"A lot depends on (the seniors group) AARP giving its final OK to this thing," Joseph Antos, a health policy analyst with the American Enterprise Institute, told United Press International on Monday. "The AARP really does, in the minds of politicians, represent seniors."

AARP -- with its 35 million members -- Monday endorsed the compromise after holding itself somewhat aloof. Last June, the association would not support either the House or Senate version.

"This bill is far from perfect," Mike Naylor, AARP's advocacy director, told United Press International, but added the compromise is acceptable and will help seniors with their drug costs. So this week AARP will begin a "full-scale support campaign," he said, including public advocacy and advertising on local television and cable as well as in newspapers.

Although the AARP decision will buoy Republicans who support the compromise, there are other senior voices that could influence the House and Senate votes, particularly because lawmakers will have to defend those votes when they return home for the holidays.

"I find this bizarre," Sen. Tom Harkin, D-Iowa, said of the AARP endorsement. AARP had conducted three meetings in Iowa regarding Medicare, he said, including hundreds of seniors. When those seniors were asked to show hands in support of either bill, "not one senior raised his or her hand to support it," Harkin said.

"Now what has come out of conference is worse than what's in the Senate bill. How could AARP be for it?" he asked.

Aside from the main senior advocacy groups, Republican and Democratic lawmakers -- and some organizations that have supported each side -- also spent some this summer and fall rounding up seniors to voice support or opposition.

The American Association for Health Plans deployed a couple of hundred seniors in phone banks during the group's annual convention. The seniors cold-called their peers to tell them to support the final legislation, whatever it turned out to be. AAHP has supported a drug benefit in Medicare, but also is protecting the $1.6 billion in the legislation that would help shore up Medicare+Choice HMO plans.

The Congressional Budget Office still must "score" the bill -- determine if its cost adheres to the $400 billion limit -- before it heads back to the Senate and House for final votes.

Antos said the final legislation "may be as good as it gets" and therefore "difficult for Democrats to either vote against or filibuster if AARP says 'Let's go for it.'"

The AARP endorsement is even more powerful because about half of its members are working either full or part-time and nearly one-third are under age 60 -- five years from qualifying for the Medicare benefit. They have a vested interest in the legislation, which will take seven years to unfold, and Antos said they are "every bit as interested" as the senior beneficiaries.

The final bill creates a prescription drug discount card in 2004 to help seniors pay for 15 percent to 25 percent of their drug costs. The actual drug benefit would begin in 2006 and calls for an average monthly premium of $35 and a $275 annual deductible.

Other provisions include:

-The government would pay 75 percent of senior drug costs up to $2,200, but from then until spending reaches $3,600 there is a spending gap during which the beneficiary pays all drug costs out of pocket.

-Catastrophic coverage begins after $3,600, with the government paying 95 percent.

-Low-income seniors would get additional help paying for some or all of the premiums and deductibles and would be exempt from the coverage gap, but would be required to make a minimal co-payment per prescription.

The conferees' meld of the Senate and House bills also includes a greatly reduced version of the most controversial provision: the so-called 2010 privatization language.

The original House bill proposed tying fee-for-service Medicare payments to payments to private plans participating in Medicare nationwide. But the compromise calls for a demonstration project, beginning in 2010 in select metropolitan areas with at least 25 percent of their Medicare population already in private plans.

Conservative Republicans are not thrilled with that idea. The privatization language was watered down and many Democrats are unhappy because they wanted the entire idea drowned out. The Democratic and Republican leadership groups were assessing their positions. President Bush supported the compromise in various statements over the weekend, as did Health and Human Services Secretary Tommy Thompson.

Naylor said though a number of issues played a part in AARP's decision, a key was softening privatization language "that has been drastically reduced to something that is acceptable."

AARP endorsement notwithstanding, other senior and consumer advocacy groups Monday were not budging in their opposition to the compromise.

Robert Hayes, president of the Medicare Rights Center, based in New York, said the compromise because it did not meet its low-bar criterion for support: The final legislation had to be better than no bill at all.

"It's a painful decision to be against this bill because it will help some people but on balance it will hurt many more people more profoundly," he said. "The complexity will confound both the operation and the politics of it. Ultimately if consumers understand it, they'll support anyone who opposes it."

Edward Coyle, executive director of the Alliance for Retired Americans, said in a statement the group "categorically opposes" the bill and added its 3 million members "won't be fooled. They know a lemon when they see it, and the GOP is offering seniors a lemon of a bill."

Coyle said the privatization language still would destroy the traditional Medicare program and raise premiums for seniors who will be forced into private plans.

Ron Pollack, executive director of Families USA, told UPI he remains hopeful the bill can still be amended to address problems of "too much in terms of undermining and privatizing Medicare and too little help to the seniors who can least afford to pay for prescription drugs."

He said Sen. Edward Kennedy, D-Mass. -- who was largely responsible for solidifying Democratic support for the Senate bill in June but has come out in opposition to the conference compromise -- still could be a pivotal force in action on the bill in the Senate. Kennedy said over the weekend he thought the bill would not pass the Senate.

"Ted Kennedy is still probably the single most influential voice of Senate Democrats. I don't think he's given up on this bill," Pollack said.

Paul Ginsburg, president of the Center for Studying Health System Change in Washington, said the compromise puts Democrats who oppose the deal in a very difficult position, especially if enough Republicans support it.

"Even if they believe many seniors are not going to be happy, they're never going to know if it is not enacted," he told UPI.

The full conference committee must still take a final vote on the agreement before action shifts back to the House and Senate.


Ellen Beck covers healthcare policy for UPI Science News. E-mail

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