Bush
signs new Medicare bill
WASHINGTON (AP) -- The new prescription
drug benefit signed into law Monday by President
Bush as part of major Medicare changes will
confront seniors with numerous and sometimes-difficult
choices on their health care coverage.
Bush
said the new drug insurance "will save
our seniors from a lot of worry." But
the bill's critics said the worries have
just begun for Medicare's 40 million older
and disabled Americans.
The
government will spend nearly $400 billion
over the next 10 years to subsidize prescription
drug coverage, which begins in January 2006.
At the same time, the government will encourage
insurance companies to offer private plans
to millions of older Americans who now receive
health care benefits under terms fixed by
the federal government.
"Medicine
has changed but Medicare has not -- until
today," Bush said, explaining that
prescription drugs and outpatient care have
replaced hospital stays over the past two
decades. "Our seniors are fully capable
of making health care choices, and this
bill allows them to do that."
Republicans
generally hailed the signing as a political
triumph they could use in next year's election
to neutralize Democrats' historical advantage
on issues regarding the elderly.
"Democratic leaders have lashed out
at us, at the president and AARP,"
House Majority Leader Tom DeLay of Texas
said. "But Democrats have no one to
blame but themselves for their abject failure
on health care. We wanted a bill, they just
wanted an issue, and now the American people
know who took their concerns seriously."
Democrats
pledged to fight in the Republican-controlled
Congress for changes in the law, principally
for measures to bring down the price of
prescription drugs. "You sold us out,
so we're going to go all out to repeal what
you've done," Sen. Edward M. Kennedy,
D-Mass., said.
The
first tangible result of the Medicare law
will be prescription drug discount cards
that the president said would take effect
in June. He said seniors will receive a
mailing in the spring to explain the card,
which will cost no more than $30 a year.
It will offer discounts that Bush said will
range from 10 to 25 percent off retail prices.
Critics say the promise of savings is wildly
inflated.
The
president sought to reassure seniors Monday
that their choices will be explained to
them in detail and that they can keep the
health care they have.
''If
you don't want to change your current coverage,
you don't have to change,'' Bush said.
But
that option may not exist for some seniors.
The Congressional Budget Office estimates
that 2.7 million retirees will lose the
drug coverage they now receive from former
employers, although other projections are
much smaller.
And
those seniors who now rely on supplemental
insurance to defray the cost of prescription
drugs will be forced to make a change, as
these so-called Medigap policies will be
barred from offering a drug benefit beginning
in 2006.
Some
Medicaid beneficiaries, among the poorest
of seniors, also could see restrictions
placed on their drug coverage, several health
analysts said.
Whether
to sign up for the drug benefit or switch
from traditional Medicare to an HMO or preferred
provider organization will be a decision
that for many seniors will depend on their
current or anticipated future spending on
drugs.
After
paying for the first $250 in prescriptions,
seniors will be responsible for 25 percent
of the next $2,000 in drug costs. Between
$2,250 and $5,100 in drug costs, the government
will pay nothing. Over $5,100, the government
pays all but 5 percent of prescription costs.
The
monthly premium for the drug plan is estimated
to be a national average of $35 in 2006.
But the exact shape and cost of the drug
benefit also could differ from one region
of the country to the next. And nothing
in the law precludes private insurers from
offering more generous but also more costly
plans.
The
president said the average senior will see
today's drug bill cut roughly in half, but
his calculation includes a savings of 20
percent that is not found in the law. Instead,
the administration assumes that insurers
will take advantage of seniors' aggregate
purchasing power to negotiate drug prices
that are on average 20 percent less than
today's retail prices.
The
discount drug card will offer the administration
a test run of how well it can explain seniors'
choices.
The
cards will be sponsored by insurance companies,
wholesale and retail pharmacies and pharmacy
benefit managers that now administer drug
insurance programs for companies and the
government.
The
cards are likely to offer different discounts
for different drugs made by different companies,
so that seniors will have to choose the
drug card that meshes best with their prescription
medicines.
Pricing
information will be posted and updated on
the Medicare Web site and also will be available
from the Medicare help line, 1-800-Medicare.
Prices
and prescriptions may change, but the bill
says participants can opt for a different
card only during the annual enrollment period
or under exceptional circumstances, such
as a long-distance move. The drug benefit
will have a similar restriction.
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