Bush Signs Sweeping Medicare Bill That Includes Drug Benefit

New York Times via yahoo ^ | December 8, 2003 | CHRISTINE HAUSER The New York Times

[snopercod]

President Bush signed legislation today that creates a prescription drug benefit for the elderly, launching the biggest changes to the Medicare system since its creation in 1965.

"For the first time, we're giving seniors peace of mind that they will not have to face unlimited expenses for their medicine," Mr. Bush said just before sitting down at a desk in Constitution Hall, near the White House, and signing the new law, surrounded by applauding supporters and an audience of several hundred people. Presidential bill signings typically are set at the White House, on smaller scale.

The bill, which the government estimates will cost $400 billion over 10 years, would remake Medicare in part by offering drug benefits to 40 million elderly and disabled people while giving insurance companies and private health plans a huge new role in Medicare. The legislation also allows the elderly to set up health accounts in which they can set aside money tax free to pay for future health care.

Mr. Bush hailed the legislation in a televised 20-minute warm-up speech today, offering case studies of elderly people in the audience who he said would be among those to benefit from the Medicare overhaul.

The Republican-controlled Congress gave final approval to the bill on Nov. 25 when the Senate, voting 54 to 44, passed the measure, handing the president a political victory on an issue that has historically worked to the advantage of Democrats.

Eleven Senate Democrats, most of them moderates, joined 42 Republicans and one independent in voting for the legislation; 9 Republicans and 35 Democrats voted against it.

Republicans hope to embrace the legislation as political leverage in the coming election year. Even though a majority of Democrats voted against it, Mr. Bush said that its passage with at least a modicum of Democratic support showed that old partisan differences had been overcome to fulfill a promise to the elderly.

The Medicare overhaul comes at a time when the older segment of the population is growing rapidly, meaning the number of older voters will also be increasing.

"I visited with seniors around the country and heard many of their stories," Mr. Bush said today. "I'm proud that this legislation will give them practical and much-needed help."

But the legislation is not without its critics. Opponents think it risks undermining traditional Medicare, and there have been complaints that the coverage will not be comprehensive.

Medicare beneficiaries will not be allowed to buy insurance to cover their share of prescription drug costs under the new Medicare bill. Health economists have long asserted that when beneficiaries are insulated from the costs, they tend to overuse medical services.

AARP, the largest organization of older Americans, backed the legislation over the objections of some of its members and traditional allies in the debate on the proper role of government and private markets in providing health care to the elderly.

"This bill helps those who need it the most people with low incomes, as well as those with high drug costs," said AARP's chief executive, William D. Novelli, whose endorsement of the bill was crucial to its passage.

The new benefit, covering about 75 percent of drug costs up to $2,250 a year, would begin in 2006. Next year, Medicare beneficiaries could buy Medicare-approved drug discount cards, which officials say could reduce pharmacy bills by 15 percent or more.

When the bill passed the Senate last month, several Democrats charged that it would enrich insurance and drug companies at the expense of the elderly, who, Democrats said, would would be angry when they learned details of the bill.

"This is lousy legislation," said Tom Daschle, Democrat of South Dakota, the Senate minority leader. "We may spend the rest of our careers repairing the flaws of this bill." Mr. Daschle later introduced legislation that would repeal some of the new legislation's more contentious provisions and allow Americans to import cheaper drugs from Canada and Western Europe.

Under the bill, a Medicare beneficiary would be responsible for the first $250 of drug costs, and insurance would then cover 75 percent of costs up to $2,250 a year. Coverage would then stop until the beneficiary had spent $3,600 out of pocket (for a total of $5,100 in prescription drugs). Medicare would pay 95 percent of the cost of each prescription beyond that.

A Medicare recipient could stay in traditional Medicare and get drug coverage by signing up for a stand-alone drug insurance policy. Or the person could join a private plan covering drugs along with doctors' services and hospital care.

Elderly people with low incomes would receive additional assistance enabling them to buy drugs for $1 to $5 a prescription. Premiums and deductibles for their drug coverage would be reduced or eliminated.

Medicare beneficiaries with incomes of more than $80,000 a year would, for the first time, have to pay higher premiums for the part of Medicare that covers doctors' care.

The bill would also increase Medicare payments to doctors and hospitals, speed the marketing of lower-cost generic drugs and offer tens of billions of dollars in subsidies to employers to encourage them to continue providing drug coverage to retirees. The bill also emphasizes preventive health care.

Millions of Medicare beneficiaries have bought private insurance to fill gaps in Medicare. But a provision of the legislation prohibits the sale of any Medigap policy that would help pay drug costs after Jan. 1, 2006, when the new Medicare drug benefit becomes available.

[Southack]

"This Medicare PDP is a boondoggle for BIG GOVERNMENT, drug companies and financially secure seniors. It will not lead to privatization of Medicare."

Why do you feel compelled to embellish in order to make your case?

There are no fewer than 6 Privatization options in this Medicare Reform law. There is private competition all over this Act, and there's even an additional tax cut (you can now use pre-tax dollars for your Medical Savings Accounts) in it.

You can complain about the cost, that's fine, but there is no need to go into hyperbole just because you don't like what has happened.

The *law* specifies more than half a dozen Privatization options. It's law. That's a fact. Get used to it.

[.38sw]

Pardon me for asking, but what is the point of electing Republicans to enact entitlements?

If you get a good answer to that question, let me know.

[Southack]

c#15

[FirstPrinciple]

Executive orders are not laws. Only if the Senate ratifies a treaty will the terms of the treaty become the law of our land. Othwerwise, these bureaucratic dictats are routinely challenged in courts and are thrown out by the courts regularly. BTW, if he really wanted to do something to end environmental terrorism, why doesn't he defund the EPA?

[FirstPrinciple]

What privatization?
http://www.heritage.org/Research/HealthCare/BG1708.cfm

[Southack]

"Executive orders are not laws."

Stop grasping, you're making yourself look silly. You asked if President Bush "knew" if the Senate had to ratify treaties.

Well, the fact of the matter is that President Clinton signed Executive Orders that *forced* all federal government agencies to behave as though the Kyoto Treaty *had* been ratified, even though it hadn't.

President Bush repealed those XO's, and Bush also pulled the U.S. out of the whole Kyoto ratification process.

Does none of this matter to you? Are you so opinionated and biased that you won't even give President Bush credit for duly killing the Kyoto Global Warming treaty?

[Republicon]

Wonderful...now I'll be getting robbed by the government to pay for my parents' drugs (they're both Baby Boomers). Social Security and Medicare are already going to be big enough problems for my generation because of the fecundity of the Greatest generation...now we get this load shoved onto our backs. Thanks a lot, Dubya.

I'm 20, by the way.

[FirstPrinciple]

Well, the fact of the matter is that President Clinton signed Executive Orders that *forced* all federal government agencies to behave as though the Kyoto Treaty *had* been ratified, even though it hadn't.

Like what? Please cite. How can you force government agencies to do anything that is not based on law? You can issue whatever XO you like, but if it is not based on any law, courts throw them out regularly. Ask anyone who has practiced any admin law. Even if Bush repealed those XO's, the courts would have thrown them out anyways if they are not based on US law. BTW, the Bush administration did go back on the arsenic level XO. After repealing it, I think Bush reinstated it.

[MEGoody]

"Wonderful...now I'll be getting robbed by the government to pay for my parents' drugs"

Sadly, there have been too many kids who didn't pitch in and take care of their elderly parents - that's why this came about.

There are some things about the 'bad old days' that I truly miss. Families taking care of one another is one of those things.

[onedoug]

One positive element in this is how the Republicans pulled the rug from under the so-called Democrats on one of their pet issues. The lefties seemed cold-cocked by this, and that is very satisfying.

People are best weened from socialism. Thus it's difficult to see how a more overtly market based plan might have been acheived in such a partisan environment as is currently the case in this country.

I'm encouraged by tax exempt medical savings accounts, and hopeful that people will take more readily to more market oriented health care alternatives.

It ain't perfect, but it's a damn-site more preferable to Hillary care.

[.38sw]

You won't be paying for just your parents' drugs, you'll be paying for wealthy people's parents drugs, and everyone else's parents' drugs. I have told my nephew, who is just a few years older than you are, that he and his friends will be looking at huge tax increases to pay for everyone else's parents' drugs. He supports national health care, and this is one big step in that direction. I don't think he realizes just yet what a big ticket item this is, and he'll be paying for it.

I'm considerably older than you are, but I think that this drug benefit is a huge mistake. It will cost far more than estimated. Government programs always do. Besides, where in the constitution does it say that if you are over 65, you can force everyone else to pay for your medical care and prescription drugs? What next? Your housing and food? After all, those are necessities as well.

[Southack]

"Like what? Please cite. How can you force government agencies to do anything that is not based on law? You can issue whatever XO you like, but if it is not based on any law, courts throw them out regularly."

Do you not even hear yourself?

You are grasping at straws. You are bound and determined to question "everything" from every possible angle rather than dare give President Bush the slightest bit of credit.

You asked for an answer; I gave you an answer. Then you denied that XO's could even have any power, and now you want me to cite the actual XO's, and no doubt once I do that you'll find yet more weasel words rather than give Bush any credit for killing the Kyoto Global Warming treaty.

It's clear that your mind is made up, and mere facts aren't going to change that for you. In your warped world, Bush is bad, and no argument otherwise will dare be tolerated.

[FirstPrinciple]

Calling me names doesn't enforce your points. But, I get your drift. You have no evidence. You didn't give me an answer. You diverted your point. When I challenged it, you had ne reply. I will wait till you get an answer back from the RNC talking points.

[Mo1]

Gee .. guess you are a big fan of the Clinton Admin huh?

[Reagan Man]

I'm embellishing nothing. Your faith in BIG GOVERNMENT isn't held by the vast majority of conservatives or by most Republicans for that matter. This is a political victory for the GOP and will help get PresBush and Republicans re-elected in 2004. But it does nothing to reduce the size of government and is fiscally irresponsible.

Here's what the Heritage Foundation has to say about this $400 billion unfunded government program.

The Medicare prescription drug proposal is bad health policy, exacerbating the flaws in a system that has almost no market-based incentives to improve service and control costs. But the House and Senate bills also will undermine sound tax and economic policy in several ways. Specifically:

The size of government will expand

A new entitlement will take America even faster down the road that has caused so much economic damage in Europe's welfare states. Indeed, the unfunded Medicare expansion is essentially a huge future tax increase since the population of Medicare recipients will nearly double once the baby-boom generation retires. Ironically, just when some European countries are waking up to the problem and restraining unfunded entitlements, America will be creating an enormous new entitlement.

President Bush's recently enacted tax cut and tax reform package will likely be the first casualty

Because of arcane budget rules, the bulk of the 2001 and 2003 tax cuts expire at the end of 2008 and the end of 2010. Extending these tax cuts or making them permanent will be enormously difficult in an environment of skyrocketing spending for government-provided health care. Indeed, the creation of a prescription drug entitlement may be akin to repealing the Bush tax cuts.

By adding to the deficit, the huge new unfunded liability will likely be the death knell of further tax relief and fundamental tax reform

A prescription drug benefit means bigger deficits--a problem that will intensify as the baby boomers start to retire in the next decade. Once these demographic and fiscal variables become part of the budget forecast, lawmakers seeking to cut taxes and create a simple and fair tax code, such as the flat tax, in all probability will face insurmountable political obstacles.

A new entitlement means bigger government, and bigger government means higher taxes, especially when politicians are expanding the welfare state and neglecting much-needed Medicare reform. Simply stated, the prescription drug benefit will make America more like stagnant European nations such as France.

[FirstPrinciple]

Maybe they have access to some 8 ball which tells them how everything will just work out perfectly in the future. The cost of health-care will not rise, the price of drugs will not increase and this program will not cost 2 trillion like every other thinking economist has projected. Who knows maybe they are right?

[Southack]

"Calling me names doesn't enforce your points. But, I get your drift. You have no evidence."

Wrong again. Look, I didn't call you a name. Likewise, I do have evidence of which I speak.

The problem is that you won't give me credit for it even if I present it.

I mean, come on, are you going to state factually that you *will* give Bush credit for killing the Kyoto Global Warming treaty if I show a single example of Clinton using Executive Orders to enact the Kyoto treaty behind the scene?

Admit it, no matter how many examples of XO's that I gave you, you still wouldn't give President Bush even the slightest bit of credit for killing the Kyoto Treaty.

[FirstPrinciple]

Now that I think of it, maybe Bush back-loaded the tax-cuts for a reason. He didn't want to have to be constrained by smaller govt revenue in the short run, so he could have his spending priorities. If the tax-cuts were front-loaded, then deficits would rise in the short-run, which would force the Fed to raise interest rate. Bad strategy for re-election. Maybe he wanted to have his cake and eat it too.

[FirstPrinciple]

I wont until you give me evidence. If it is such a self-evident truth, the examples must be handy. You still haven't refuted my point that XO's not based on US law are routinely thrown out by the courts, which is my main point to your dodge. Show me the money.

[RJCogburn]

Witholding comment for fear of getting banned.

Well, I'll take my chances.

This is just the latest in the list of Bush actions that increase the size, power, and expense of government. He is no conservative on the domestic front. He is a poor excuse for what we hoped would be a Republican.

He does not have so far as domestic policy, GRIT.

I won't vote him again.