Medicare Fight Heating Up

Tibi swim wear models walks the runway at the Raleigh Hotel on Miami Beach during The Mercedes Benz Fashion Week Show being held at the Raleigh Hotel, Thursday, July 16, 2009.
(AP Photo/Jeffrey M. Boan)
Republicans made the proposed Medicare prescription drug benefit a bit more generous Thursday in a bid to win over wavering lawmakers, congressional officials said.

Told by congressional budget experts that the bill would cost less than the $400 billion Republicans have allocated, lawmakers proposed to lower the deductible for drug coverage from $275 to $250 and narrow the gap in coverage by $50.

With the change, the drug bill would cover three-fourths of drug costs between $250 and $2,250. At that point, there would be no coverage until a Medicare beneficiary had spent $3,600 out of pocket, GOP aides said.

Meanwhile, Democrats stung by AARP's endorsement of a GOP-backed Medicare prescription drug bill are lashing out at their longtime ally, claiming the seniors' group is too closely tied to the insurance industry, and more to the point, Republicans.

AARP said this week it would throw the support of its 35 million members behind what it called "not a perfect bill, but a good first step" in giving seniors insurance for their prescription drugs. It is running a massive television ad campaign to that effect in dozens of cities.

Familiar with AARP's clout, Democrats had been trying to forestall an endorsement, which would give a boost to President Bush and Republican lawmakers. When they failed Monday, they reacted with anger that showed no signs of abating two days later.

At a rally Wednesday with seniors to oppose the legislation, House Democratic leader Nancy Pelosi noted that AARP chief executive William Novelli wrote the preface to a recent book on health care by former House Speaker Newt Gingrich, R-Ga.

"AARP's leadership has been in the pocket not only of the Republican leadership in the House, but they helped write Newt Gingrich's book on how to destroy Medicare," Pelosi said.

Pelosi and Senate Democratic leader Tom Daschle of South Dakota expressed their criticism in a letter to Novelli. They asked him "to dispel any perception of a possible conflict of interest" over AARP's relationship with insurers, who would be allowed to compete for Medicare business under the pending legislation, and other companies that market to AARP members health and life insurance policies and mail-order pharmacy service.

Royalties from such arrangements — including deals with United HealthCare Insurance Co., Metropolitan Life Insurance Co. and Advance PCS pharmacy benefit manager — accounted for more than a third of AARP's $636 million in revenues last year, according AARP's 2002 annual report.

Spokesman Steve Hahn denied any conflict, noting that the mail-order pharmacy business probably would suffer if many AARP members were to opt instead for a drug benefit under Medicare.

Eighty-five Democrats over the age of 50 told Novelli in another letter that those who were AARP members were quitting and those who didn't belong would never join.

Outside of AARP headquarters on Wednesday, a couple dozen people gathered to cut their membership cards in protest of the organization's endorsement of the Medicare plan.

"I'm here to let AARP know that we want them to reconsider, to change some of the things that they've settled for," said Gloria Chestnut, 62, who rode with other senior citizens on a bus from New York City.

Six of the nine Democratic presidential candidates this week criticized AARP for supporting the bill, saying it was a giveaway to private insurers that will undermine the federal health program for the elderly.

Some Republicans chuckled at the reversal of roles, recalling that Democrats only recently held AARP in the highest esteem. "Democrats have been down the street burning their AARP cards this afternoon," Rep. Mark Foley, R-Fla., said. "A month ago, I was told by my colleagues on the other side that AARP was the gold standard of senior lobbying organizations."

GOP leaders tentatively set a vote for Friday on the bill, the product of months of negotiations among House and Senate Republicans, the Bush administration and Democratic Sens. John Breaux of Louisiana and Max Baucus of Montana.

But Pelosi said Democratic opposition to the bill was "a party position," signaling an aggressive effort to unite the rank and file, scuttle the bill and claim credit with voters.

The legislation would make the most far-reaching changes in Medicare since the federal health care insurance program for the elderly and disabled was created in 1965. It would add a prescription drug benefit, with federal subsidies for lower-income beneficiaries. In addition, it would encourage private companies to create new preferred provider organizations, in hopes that seniors would select them over the traditional health care system they have known.

Supporters argue the private plans will deliver better health care more cheaply, curtailing the cost of Medicare over time. Critics worry that the legislation will begin to undermine the foundation of Medicare — a standard benefit at a uniform price.