White House to Propose Extensive Medicare Changes

FORT HOOD, Texas – The Bush administration later this month will propose sweeping changes to Medicare, moving to include a prescription drug benefit for seniors in the government program, administration officials said Friday.

A central component of the changes aimed at ensuring Medicare's survival will be competition among providers, said senior officials who discussed the issue only on grounds of anonymity. President Bush has long proposed such reforms as a way to cut escalating costs.

Looking to the 2004 presidential election, adding a prescription drug benefit to Medicare is a central political goal of Bush and Congress. But one administration official said the government can't just "bolt a drug benefit onto Medicare without structural improvements" to the system.

The primary goal is saving Medicare from bankruptcy, this official said, speaking on the condition of anonymity.

The administration has new confidence it can enact the changes Bush proposed in summer 2001, given the Republican takeover of the Senate. Incoming Senate Majority Leader Bill Frist of Tennessee is a Bush ally, surgeon and major player on health-care issues.

Bush will send guidelines to Capitol Hill in the coming weeks that will include the drug benefit. White House officials were said to be still working out details.

One AARP official said it was too early for the nation's largest senior citizen lobby to declare opposition or support. "Medicare does need to be brought into the 21st century and does need to have adequate prescription drug benefits," said John Rother, AARP's director of policy and strategy. But AARP also wants to see provisions that will allow "people who are perfectly happy with Medicare the way it's run today to stay put," Rother said.

But some Democrats were balking at the idea of changes beyond adding a prescription drug benefit. Sen. Edward Kennedy, D-Mass., said senior citizens deserve "a prescription drug benefit -- no strings attached."

"Medicare should not be the price senior citizens have to pay for the affordable prescription drugs they deserve," Kennedy said.

The changes -- first reported in Friday's editions of The New York Times -- ultimately could make Medicare look more like private insurance.

Under several proposals being considered by the administration, Medicare beneficiaries would be encouraged to enroll in an HMO or in a new version of the fee-for-service program to obtain prescription drug benefits.

The new option would offer more extensive coverage of preventive services, like mammograms and colon cancer tests, and would provide greater protection against the high costs of serious illnesses. But for such protection, Medicare beneficiaries might be required to pay higher premiums and co-payments, along with any new charge for drug coverage, the Times said, citing unnamed sources.