Tough Medicare choices for Congress

Personal healthcare spending in the US has increased from $23.4 billion to $1.2 trillion from 1960 to 2001 (the most recent year available), according to the Congressional Research Service. While personal health costs are expected to increase at an average rate of about 7 percent a year between 2003 and 2012, prescription-drug costs are jumping at a rate of nearly 16 percent a year. Those increases, added to the looming demographic bind, leave Congress with tough options.

For Republicans, adding a prescription drug benefit to the current Medicare program means backing a potentially huge new entitlement at a time when their goal is to cut taxes and limit the size of government.

On March 4, President Bush proposed three broad options for seniors - ranging from prescription drug discount cards for people remaining in the original fee-for-service Medicare program to managed care plans with broader prescription drug coverage. It would, in effect, give people an incentive to use private sector health plans.

Most Democrats have strongly opposed this approach, saying that those who participate Medicare program should get the same help in paying drug costs as those who exit the program. "There has to be a defined benefit," said Senate minority leader Tom Daschle (D) of South Dakota this week. "But I start with the hope, and I must say the expectation, that we can work together to find common ground."

The effort to find common ground will be much more important in the Senate than in the House, where GOP leaders can use House rules to limit debate. In the Senate, Democrats could opt to prolong debate indefinitely, unless Republicans find 60 votes to pass their legislation.

There are potential pitfalls for both parties if they fail to come up with a solution in this session of Congress. "This could be a Republican Achilles' heel, if they do not do act before the election," says pollster Zogby. But there's also a downside for Democrats, if they are perceived as blocking a plan.

"The voters are split on whether it should be an expansion of Medicare or a private sector initiative.... What they're saying is: We don't really care. Just do something," he adds.

Meanwhile, some of the most powerful lobbies in the nation are converging on Congress to influence the outcome. Pharmaceutical companies - leading contributors to federal campaigns in the last decade - strongly oppose any effort to use federal clout to negotiate down drug prices.

However, the influential American Medical Association is throwing its weight behind President Bush. "The AMA believes that patients need to continue existing benefits and have expanded choice, such as the federal employees' health benefit program, and we're happy that President Bush has suggested a plan that goes in this direction," says Donald Palmisano, president-elect of the American Medical Association.

Page: 1 | 2