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Friday, July 13, 2001 - Page updated at 12:00 AM

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Bush describes his 'framework' for Medicare

The Washington Post

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WASHINGTON — President Bush laid out his vision for the future of Medicare yesterday, calling for a new prescription-drug benefit for elderly Americans, a wider choice of private health plans, and looser regulation of the health-care industry.

Bush said the Medicare system should include better coverage for preventive care, new treatments and serious illnesses. He also proposed that the program give more help to people with unusually large medical bills, for the first time picking up all their health expenses above a certain amount.

At the same time, the president said the program, which provides health insurance to 39 million elderly and disabled Americans, must be put on a "sustainable financial footing."

The principles Bush laid out are, in essence, guideposts that the administration hopes lawmakers will follow. "Medicine is constantly improving. Medicare must keep pace," Bush said.

House and Senate leaders have said they're eager to revamp the system this year.

Administration officials said they made a tactical decision to issue what Bush called a "framework" of eight principles, instead of a nuanced legislative proposal, reasoning that it was the most conciliatory way to spur Congress' work on an issue that's proven highly polarizing in the past. Thus, the president didn't mention how much money the extra benefits might require or specify how he'd keep the program solvent.

The principles represent a departure from GOP thinking about Medicare of the past few years. Many Republicans have argued that elderly Americans — and the program's long-term financial health — would be better off if more people enrolled in private health plans that competed for their business. Bush yesterday said he believed in such market competition, too.

He did not look entirely to the private sector, however. Acknowledging public antipathy to managed care and the fact that health plans recently have dropped out of Medicare, the president also proposed substantial improvements in the traditional "fee-for-service" version of the program — traditionally favored by Democrats.

Bush, as expected, announced that the government will work with private companies to offer every Medicare patient a pharmacy-discount card. The White House said the plan can be implemented by the Department of Health and Human Services by January without congressional approval. It will rely on companies that manage pharmacy benefits to negotiate discounted prices, then pass on those savings to elderly people.

The pharmacy-discount proposal has quickly emerged as the focal point of criticism of Bush's ideas for Medicare. Senate Majority Leader Tom Daschle, D-S.D., yesterday called the discount cards "the storefront promise of yet another gimmick."

One of the most technical but profound of Bush's proposals would change the basic structure of Medicare, in which hospital stays have been funded separately from "outpatient" care.

Hospitalized patients have had to pay a deductible of $800, while those who use other services have paid a deductible of $100. Under the White House proposal, the deductible would be the same.

In another principle, Bush indicated he was sympathetic to complaints of overregulation by doctors, hospitals, insurance companies and other providers of care to Medicare patients.

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