Medicare changes

WASHINGTON - President Bush signed a new prescription drug benefit into law Monday as part of historic Medicare changes that also will confront seniors with numerous, 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' usual 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.

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.


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