Friday, January 24, 2003

Medicare

Bush Administration Considering Requiring Future Medicare Beneficiaries To Join Managed Care Plan To Receive Drug Benefit

      The Bush administration plans to release a Medicare reform plan that would establish a prescription drug benefit for beneficiaries who enroll in a new managed care program, the Washington Post reports. The plan relies on HMOs and other private insurers (Goldstein, Washington Post, 1/24). Under the plan, which would begin in 2006, Medicare beneficiaries could remain in the traditional fee-for-service program, enroll in regional HMOs that offer prescription drug coverage, or enroll private health plans with "enhanced fee-for-service benefits" that include prescription drug coverage. Private health plans would submit bids to the federal government each year on the amount that they would charge for benefits. The government would select three of the lowest bidders in each of 10 areas of the nation to participate. Medicare beneficiaries who enroll in the most expensive of the three plans would have to pay higher premiums, but those who enroll in the least expensive plan could retain 75% of the amount saved, the New York Times reports. The government would establish the standard for prescription drug coverage, but private insurers could offer different benefits and copayments within the standard. Under the standard coverage, Medicare beneficiaries would pay a $275 annual deductible and half their prescription drug costs up to $3,050 per year; in addition, Medicare would cover 90% of the cost of prescription drugs after beneficiaries spent more than $5,500 per year. Administration officials estimate that the prescription drug benefits in the plan would cost $388 billion over 10 years, and they predict that about 77% of Medicare beneficiaries would enroll in one of the private health plans (Pear, New York Times, 1/24).

Other Reforms
The plan would make additional Medicare reforms, the Post reports. Under the plan, the government would combine deductibles for Medicare Part A and Part B (Washington Post, 1/24). In addition, the plan would cover 90% of costs for catastrophic illnesses that exceed $6,000 per year. The plan also would eliminate copayments or other out-of-pocket costs for preventive health coverage, but Medicare would charge a copayment for home health care for the first time since 1981. Some of the details of the plan remain "in flux," and administration officials may not have them resolved before President Bush delivers his State of the Union address on Jan. 28, the Times reports (New York Times, 1/24). Some of the unresolved details include whether to provide prescription drug coverage to Medicare beneficiaries who do not enroll in private health plans and whether the government will allow beneficiaries to enroll in the plans on a permanent or short-term basis (Washington Post, 1/24). Bush will likely provide additional details in his fiscal year 2004 budget proposal, which he will release on Feb. 3 (Lueck/McKinnon, Wall Street Journal, 1/24).

'Substantial Political Risks'
The Journal reports that plan "carries substantial political risks," as Democrats will likely oppose proposals that do not provide prescription drug coverage to beneficiaries who remain in fee-for-service Medicare. Jim Manley, a spokesperson for Sen. Edward Kennedy (D-Mass.), said that the plan would open the administration to a "significant amount of criticism from Democrats that would continue through the 2004 elections" (Wall Street Journal, 1/24). The plan also will likely face "fierce opposition" in Congress from Democrats and some Republicans who support proposals that would add a prescription drug benefit to Medicare without larger reforms (Washington Post, 1/24).

Other Medicare News
In related news, AARP officials said on Jan. 23 that they will not oppose efforts to delay a scheduled 4.4% reduction in Medicare reimbursements for physicians, CongressDaily reports. Last year, AARP officials warned lawmakers not to provide additional funds for Medicare providers until they added a prescription drug benefit to the program (Rovner, CongressDaily, 1/23).

PBS' "NewsHour with Jim Lehrer" on Jan. 23 included an interview with Senate Minority Leader Tom Daschle (D-S.D.) on Medicare reform and other issues (Ifill, "NewsHour with Jim Lehrer," PBS, 1/23). A transcript of the segment is available online. In addition, the segment is available online in RealPlayer.