Bush Unveils Medicare Reform Plan

W A S H I N G T O N, July 12 -- President Bush today unveiled his plan to reform Medicare and a new initiative to lower the cost of prescription drugs for seniors by giving them a discount card.

"We need to bring Medicare into the 21st century to expand its coverage, improve its services, strengthen its financing and give seniors more control over the health care they receive," the president said as he outlined his proposal to overhaul the 36-year-old federal health insurance program at a Rose Garden ceremony this morning.

The announcement came as Congress is preparing to take up the contentious issue of Medicare reform.

"Medicare's most pressing challenge is the lack of coverage of prescription drugs," Bush said.

Getting Carded

There is bipartisan consensus that Medicare should be expanded to provide some level of coverage of pharmaceutical costs. But with Republicans and Democrats divided over how exactly a drug benefit should be added and with reforms likely years away, White House officials say Bush's so-called Prescription Drug Discount Program is aimed at providing immediate relief from soaring drug costs.

Drug manufacturers have already negotiated bargain prices on many of their most popular medicines and private health insurance plans often cover the costs of expensive drugs. The president's initiative would give seniors on Medicare access to similar discounts by harnessing their collective buying power.

The program calls for companies known as pharmaceutical benefit managers to issue Prescription Drug Discount Cards to all Medicare recipients. Seniors would be able to use their identification cards to get discounted drug prices at local pharmacies.

"Under my plan, participating pharmacies will get new customers and seniors will get high quality drugs at a lower price," Bush said.

According to a senior administration official, the plan could be implemented without congressional approval, using "existing administrative authority," because it does require new federal spending. The government's main role, the official said, would be to inform seniors of the plan with a $35 million advertising and education campaign this fall.