Bush is expected to present a plan based largely on a proposal he made during last year's presidential campaign, which called for $198 billion in new spending over a 10-year period.
Under that proposal, Medicare would cover prescription drug-costs on a sliding scale, with full coverage for people earning at or below 135 percent of the poverty level and 25 percent of the costs covered for those making more than 175 percent of the poverty rate. All drug and catastrophic medical costs over $6,000 would be fully covered. The president also wants Medicare to offer recipients a choice of competing, private health insurance plans.
Bush will likely lay out a broad outline for reform and leave it to Congress to hash out the specifics. His original proposal was patterned after a bill by Sens. John Breaux, D-La., and Bill Frist, R-Tenn. — the dynamic, bipartisan health-care duo that proposed a patients' bill of rights that was backed by Bush, but rejected by the now-Democratically controlled Senate. The Congressional Budget Office pegs the 10-year cost of that plan at $176 billion.
Most Democrats oppose the Breaux-Frist legislation and Bush's plan, arguing they would leave Medicare recipients at the mercy of health maintenance organizations — a notion that is as much anathema to many liberals as private school vouchers.
Senate Democrats, led by Sen. Bob Graham, D-Fla., are trying to rally support for a proposal to create a more comprehensive, voluntary prescription-drug benefit within Medicare itself, at an estimated cost of $318 billion.
Their plan, like the rival Breaux-Frist measure, would use a sliding scale to determine a beneficiary's level of prescription drug coverage. But Democrats would cap annual out-of-pocket drug expenses at $4,000 — $2,000 less than under the Breaux-Frist and the Bush plan. Under the proposal, most Medicare beneficiaries would end up paying only half of the overall costs for their prescription drugs.
The key difference is that while the Democratic proposal calls for private pharmacy benefit managers to administer the new drug benefits, Republican-backed measures would require beneficiaries to enroll in private health insurance plans to take full advantage of the federal subsides.
In many ways the political dynamics surrounding the debate over Medicare resemble the partisan scrap over Social Security — another popular, decades-old government program facing bankruptcy. In both cases, Republicans want to tap free-market forces — in the case of Social Security, it's the stock market — in an effort to extend its solvency, while Democrats argue the GOP's plans would shortchange the elderly and that Bush's tax cut places the program in jeopardy.
Lindsey said last week he expected this year's federal budget surplus to fall short of the administration's earlier projection by $56 billion.
With that projected surplus growing smaller and smaller, the president and congressional leaders on both sides of the aisle may find themselves under increasing pressure to come up with spending cuts or tax increases to fund domestic priorities, such as a prescription-drug benefit for Medicare.