President Bush outlined his proposal for a new Medicare system giving beneficiaries three coverage options, including leaving Medicare for a private health plan. In a speech to the American Medical Association, Bush acknowledged that reforming Medicare is "a large and complicated task." He said seniors who stay in traditional Medicare would receive 10% to 25% discounts on drug purchases and an unspecified out-of-pocket limit before increased assistance. The "Enhanced Medicare" option, largely mirroring the offerings now available to federal employees, would include a choice of several Medicare health plans providing preventive care, more extensive drug benefits than the traditional program and aid for low-income beneficiaries. The third option, which the White House has labeled "Medicare Advantage," would allow enrollment in low-cost private managed-care plans with subsidized drug benefits.
Sen. Byron Dorgan (D-N.D.) called Bush's proposal "a giant leap in the wrong direction," and other opponents said it represented a first step toward privatizing Medicare completely. Sen. Charles Schumer (D-N.Y.) said the plan "isn't going to work and isn't going to pass." House Democrats introduced their own proposal, calling for a drug benefit within Medicare, with HHS negotiating discounts from drugmakers. -- by Jeff Tieman