President George W. Bush signed into
law a bill to revamp Medicare and help seniors afford medicines,
which may increase revenue for companies such as No. 1 health
insurer UnitedHealth Group Inc. and drugmaker Pfizer Inc.
The law is the biggest expansion of the U.S. health-insurance program for the elderly and disabled since its creation
38 years ago. It gives Bush a victory for his 2004 re-election
campaign, fulfilling his pledge that Medicare would begin helping
41 million Americans pay for prescriptions.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
Learn More
The measure calls for Medicare, which just pays for drugs
administered by doctors, to spend an extra $410 billion over 10
years on medicines, the Congressional Budget Office estimated. It
also sets up a program to test competition between Medicare and
health plans run by insurers such as UnitedHealth.
“Medicare has spared millions of seniors from needless
hardship,” Bush said in Washington at the Daughters of the
American Revolution’s Constitution Hall. “Each generation
benefits from Medicare. Each generation has a duty to strengthen
Medicare, and this generation is fulfilling that pledge.”
U.S. Congressional Budget Office Director Douglas Holtz-Eakin said the Medicare bill Congress passed last month won’t
change the nation’s deficit in the near future.
“The Medicare bill won’t change the deficit very much in
the near term,” Holtz-Eakin told Bloomberg News in a televised
interview. “There really isn’t very much spending until 2006
when it’s $26 billion,” he said. The Medicare bill does “ramp
up sharply over the next several years,” Holtz-Eakin said.
Bush has taken control of an issue that has hurt Republicans
before, said Norman Ornstein, an American Enterprise Institute
political analyst. Ornstein compared Bush’s action to former President
Bill Clinton’s support for anti-crime and welfare legislation,
which had been vulnerabilities for Democrats.
Bush “looks like he cares,” Orenstein said.
Bush’s party controls Congress, which helped to break a six-
year stalemate on revamping Medicare, Bush said.
“Those years passed with much debate, a lot of politics,
and little to show for it,” Bush said. “We found a way to get
the job done.”
Drug-discount cards will go into effect in June, Bush said.
The program may boost revenue for pharmacy-benefit managers
including Express Scripts Inc. The U.S. Centers for Medicare and
Medicaid Services will run the plan, which gives discounts of as
much as 25 percent when patients pay a $30 annual fee.
Expanded drug coverage begins in 2006. Health insurers such
as Aetna Inc., Cigna Corp. and industry leader UnitedHealth will
manage the coverage for Medicare. The legislation also gives
private insurers about $14 billion to encourage them to offer
seniors broader coverage.
Under the new drug plan, patients would pay a $250
deductible each year and average monthly premiums of $35.
Medicare would pay 75 percent of drug costs up to $2,250. The
poorest seniors would get additional Medicare aid.
After spending $3,600 out of pocket on medicines in a year,
enrollees will be eligible for “catastrophic” coverage, in
which Medicare pays most of the cost for the rest of the year.
“The Medicare legislation will cause deep disappointment
for America’s seniors and people with disabilities,” said Ron
Pollack, executive director of Families USA, a consumer advocacy
group. “It provides very limited drug coverage.”
To trim the bill’s cost to $395 billion, the law cuts
payments for certain medicines and medical equipment. That will
hurt companies such as US Oncology Inc., which manages cancer
doctors’ practices, and Apria Healthcare Group Inc., the biggest
provider of home-health-care services.
Bloomberg News
