Kennedy vows fight over GOP drug bill

WASHINGTON -- Senator Edward M. Kennedy said yesterday that he would fight a Republican-crafted prescription drug bill, which he said would undercut Medicare and threaten the future of the 38-year-old entitlement.

The Massachusetts Democrat said the deal hammered out by Republican leaders Saturday night to dramatically expand and revamp Medicare and subsidize prescription drug coverage for seniors "won't pass the Senate."

The agreement, Kennedy said yesterday morning on CBS's "Face the Nation" is "basically a slush fund" for the country's insurance and pharmaceuticals industries.

"As a result of this proposal," said Kennedy, who helped write the original Medicare legislation in 1965, "you're going to find out that there are a number of seniors that have prescription drugs that are going to lose it.

"You're going to find out that some of the poorest of the poor that are receiving prescription drugs under Medicaid will now have to . . . pay more for it."

Negotiators toiled for months to reconcile the differences between separate bills passed by the House and Senate in the summer. Under heavy pressure from the White House and seniors to come up with a plan, congressional Republicans and two Senate Democrats, the only two Democrats the majority Republicans allowed to participate in the talks, unveiled a compromise proposal this weekend. The deal bears little resemblance to the original Senate bill that Kennedy crafted to provide prescription drug coverage for the elderly.

Kennedy's remarks suggested he might filibuster debate on the bill, but he didn't say so directly. For years, the Massachusetts lawmaker has supported prescription drug coverage for the elderly, but he has insisted he will not back a bill he believes undermines Medicare.

Tom Daschle, Democrat of South Dakota and the Senate minority leader, also criticized the plan, which he said "keeps drug prices high, causes 2 to 3 million retirees to lose drug coverage."

The Medicare package would expand benefits by some $400 billion over 10 years for the nation's 40 million Medicare patients, a cornerstone commitment of President Bush's 2000 campaign. The Republican agreement also calls for a large role in Medicare for private health insurers and health-care providers, which some lawmakers say is vital to preserve affordable treatment and which others condemn as an opening gambit to privatize the program.

The bill is supported by Bush -- who is under pressure to deliver a health-care reform bill, as he prepares his reelection bid -- as well as the health-care industry.

A complex of special interests, including the powerful AARP and several doctors' groups, have also praised the bill.

"I think we have a good chance of passing it," Bush said yesterday as he returned to the White House from the presidential retreat in Camp David, Md.

At the heart of the dispute over the House version is its emphasis on market forces to reshape Medicare. House leaders say such an approach is necessary to accommodate the burden of an older population, which is expected to increase dramatically in the next decade as the baby boom generation reaches retirement age and the costs of the drug benefits kick in.

Some conservatives have argued that the Republican-led deal, which limits the private-company involvement to select geographical areas, does not go far enough.

"We would have liked to have seen a greater scope for competition," said Michael Freeman, executive vice president of the Health Care Leadership Council. "But this bill moves Medicare farther into the 21st century by introducing consumer choice."

Democrats and some Republicans are worried that private health-care plans could dramatically weaken Medicare -- historically a universal benefit offered to all seniors, rich and poor -- by tempting many beneficiaries away with low rates.

Last week, 44 senators, enough to sustain a possible filibuster, sent a letter to Republican leaders objecting to the involvement of private insurance companies. Among them was Senator Olympia J. Snowe, Republican of Maine, who said in a statement that she was "deeply concerned" about the consequences of allowing private companies into the Medicare system.

The initiative, according to Snowe's statement "does not establish specifically how this policy will be implemented or how it will protect those seniors who rely on the traditional Medicare system for their insurance coverage." Nonetheless, many lawmakers could be reluctant to vote against a prescription drug bill just before an election year. Because they control both chambers of Congress and the White House, Republicans would have to struggle to explain why they could not pass a bill that makes prescription drugs available cheaply. Democrats, for their part, would find it precarious to filibuster a bill supported by AARP and its allied groups.