image: Bush signs Medicare law
Lawmakers surround President Bush as he signs the Medicare legislation into law on Monday.
updated 12/8/2003 5:30:39 PM ET 2003-12-08T22:30:39

Calling it “the greatest advance in health care coverage for America’s seniors since the founding of Medicare,” President Bush on Monday signed into law a $400 billion overhaul. In doing so, the president checked off another priority amid questions about the law’s fiscal wisdom.

The most significant part of the $400 billion overhaul adds prescription drug coverage to the federal health insurance program for the elderly, starting in 2006. Beginning next May, seniors can buy a Medicare-approved discount card for $30 or less to help offset the growing costs of prescriptions.

Bush said the measure, estimated to cost $400 billion over the next 10 years, would give older Americans “better choices and more control over their health care, so they can receive the modern medical care they deserve.”

He signed the bill — which has come under harsh criticism from many Democrats — amid great fanfare in front of an audience of seniors and congressional leaders in the Daughters of the American Revolution’s Constitution Hall.

But a wide array of other pilot programs are meant to tweak the Medicare system, and will add to the cost of the changes Bush signed into law.

One of the costliest among them sets aside $500 million for a two-year, six-state effort for at least 50,000 patients to cover a limited category of self-administered prescription drugs. “No less than 40 percent of the funding shall be for oral cancer,” Congress directed in a report accompanying the law.

Other programs are designed to help health care providers and their patients, including a two-year program to cover chiropractic services without prior approval by a medical doctor.

Still others are aimed at attacking waste, such as a three-year provision to allow Medicare to contract with private firms for “identifying underpayments and overpayments and recouping overpayments.”

The law encourages insurance companies to offer private plans to millions of older Americans who now receive health care benefits under terms fixed by the government.

“Because of the actions of the Congress, the actions of members of both political parties, the Medicare system will be modern, and it will be strong,” Bush said when the legislation cleared Congress last month.

Even before the president signed the legislation in a campaign-style event, Democrats stepped up their criticism.

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House Democratic leader Nancy Pelosi of California, Sen. Edward Kennedy, D-Mass., and other opponents scheduled a rally with seniors to underscore their claim the measure threatens Medicare’s future.

“Many people will wake up and discover that the Medicare bill is a cruel hoax,” Sen. Hillary Rodham Clinton, D-N.Y., told reporters Sunday. “It does not provide the kind of benefits that they had hoped for, and it will lead to the undermining of Medicare traditionally.”

Even some of Bush’s fellow conservatives have questioned the price tag of the reforms, which come at a time when next year’s budget deficit is projected to be some $500 billion. “The U.S. budget is out of control,” Goldman Sachs economists said last month.

In contrast to the major changes, more than a dozen short-term adjustments to Medicare are embedded in the law. Often, they were included at the behest of individual lawmakers, some of whom may have wanted a permanent change but settled for less.

Beginning in 2010, the law provides for a six-year program under which new private plans will compete directly with traditional Medicare in a few areas around the country.

Critics said it will lead to Medicare being put under private control. Even some of the law’s Republican supporters, hoping to shield seniors from the possibility of higher premiums, lobbied to have their states exempted from the test.

By contrast, other temporary provisions generally prompted little or no public notice.

The pilot program for background checks at long-term care facilities is designed to reduce patient abuse and is a longtime interest of Sen. Herb Kohl, D-Wis. At a two-year cost of $25 million, it will set up programs in up to 10 states for checks on workers who come in direct contact with patients.

Prospective employees will be required to submit fingerprints to the facilities, which will work with states to check them against an FBI database.

“Disqualifying information for employment includes information about a conviction for a relevant crime, a finding of patient or resident abuse or a felony conviction related to health care fraud or a controlled substance,” said the report accompanying the law.

Officials said the five-year program for rural hospice care stemmed from an issue raised by Mississippi’s Republican senators, Thad Cochran and Trent Lott. That program will make it easier for rural, terminally ill Medicare recipients who live far from hospice facilities to receive more care.

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