The two versions of the law passed by the Senate and House have one principal feature in common, in spite of significant differences in detail: each would nudge people off Medicare and onto private health plans.

The July 23 Washington Post noted that the differences between the two versions are about degree, not direction. They “revolve around how far the government should go to tilt the 1960s-era system from a federal entitlement to a program built on market competition,” wrote Amy Goldstein.

Republican congressman Paul Ryan from Wisconsin, who is a supporter of the “reforms,” called the House bill, which goes further along these lines, “a huge rewrite of an entitlement program.” The congressman stated that the measure would “break up the government monopoly” on health care. Speaking on June 27, the day the House voted to pass its bill by 216-215, he added that it was a step that must be taken before “baby boomers” start retiring and strain Medicare to the breaking point.

The Senate bill passed by a wider margin. A committee of the two houses will now debate the two versions of the legislation and come up with a joint bill.

Working people won the Medicare and Medicaid programs—providing health benefits, respectively, to elderly people and very low-paid workers—as part of the expansion of Social Security achieved through the Black rights battles of the 1950s and early 1960s. Medicare provides government-subsidized health care to those 65 years and older. Most recipients have to reach into their own pockets to buy costly prescription drugs.

Last winter President George Bush floated a proposal to provide coverage of drugs costs only to those who got off Medicare and joined private health plans. The bills before the House and Senate, which have received bipartisan support, would allow Medicare recipients to buy the prescription plan separately from a private insurer.

The Bush administration has endorsed the course laid out in both versions. In a question and answer section on the White House web page, government officials rejected charges that drugs payments might become “a giant leap toward a European model of government-run care.”

“Actually,” replied the administration’s spokespeople, “the leading Medicare bills in the House and Senate would move America away from the European model…. More than ever before, we would begin applying the best practices of the private health-care market to Medicare.”

The bills hold in common a number of concrete provisions:

• Three options for participants: to stay in traditional fee-for-service Medicare with no drug coverage; stay in Medicare while purchasing coverage through a private drugs-only plan; or switch from Medicare to private managed care under the name Medicare Advantage offering medical services and drug coverage. The drug benefits would not start until 2006.

• Higher deductibles and steeper co-payments than most employer-sponsored plans. Both plans would impose a $35 monthly premium. The Senate bill starts with a $275 deductible, the House $250.

• Variability from state to state and plan to plan of costs, deductibles and co-payment levels—an aspect that would undermine uniformity and universality of Medicare coverage.

• Gaps in the coverage dubbed “doughnuts.” The Senate plan includes no benefits for drug costs that are above $4,500 and below $5,813 during the coverage year. The House plan provides no coverage between $2,001 and $4,900. Those who fall into the hole and don’t qualify for coverage would still have to pay premiums.

• Introduction of means testing. Under the House version, a patient’s income would determine the threshold at which catastrophic protection kicks in. Under the Senate plan those fully eligible for Medicaid—which provides medical services and some prescription drug benefits for those the government deems “categorically needy”—would not be eligible for the program.

In addition, the House plan continues a clause for “premium support”; under this, the government would contribute a fixed, per-patient amount for drugs, instead of guaranteeing a specific level of benefits.

The bills are supported by leading members of both the Democratic and Republican parties. But they have prompted debate across the bourgeois political spectrum.

One of the most prominent backers of the Senate bill is Democratic senator Edward Kennedy. When asked by CNN if the plan would leave some senior citizens with less drug coverage than they need, Kennedy responded that it’s just a “down payment. We’re going to come back again and again and again to fight to make sure that we have a good program.”

Representative Charles Rangel of New York, another prominent liberal, disagreed. The bills would “mean the end of Medicare as we know it,” he said July 24.

Some conservatives, on the other hand, have expressed concern that the legislation is not sweeping enough, and might even lead to demands for greater government health-care coverage.

Bruce Bartlett, a columnist in the right-wing National Review, pointed to Kennedy’s comments as a warning sign. “For conservatives, Senator Edward Kennedy is like a canary [in a coal mine],” he said. “When he starts supporting their initiatives, they should get out.” Any benefit, no matter how limited, complained Bartlett, is a “burden on future generations for giving today’s seniors—who will have paid nothing for it during their working lives—an extra medical benefit on top of those they already receive.”

In an “Analysis of the White House Position on Medicare Legislation,” the rightist Heritage Foundation argued that the reform would put pressure on the government to institute price controls and subsidies to keep the cost of drugs down. The result, claimed the authors, would be nothing less than a step toward a “European-style government-run health care system.” Feigning concern for working people, they cited a Congressional Budget office report that 37 percent of all retirees with employer-based drug coverage could lose it under the Medicare bill adopted by the Senate Finance Committee.

William Novelli, the head of the American Association of Retired Persons, which has so far backed the measures, expressed reservations about the legislation from another standpoint: those who need Medicare assistance to function and survive. “The more people hear about it, the less happy they are,” he said.  
 
 
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