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With Large Ceremony, Bush Signs Medicare Bill Into Law

By David E. Rosenbaum

The New York Times -- WASHINGTON

With the pageantry of a campaign kickoff rally, President Bush signed into law Monday the legislation giving the elderly prescription drug coverage under Medicare for the first time and changing the Medicare system so that private insurance companies will have a much bigger role.

The ceremony took place in one of the largest halls in Washington, filled with thousands of cheering supporters of Bush. More than a dozen lawmakers, nearly all of them Republicans, surrounded the president as he signed his name.

The elaborate bill-signing was the most visible evidence so far of how the president intends to make the Medicare measure an important issue in his re-election campaign.

The White House distributed to lobbyists, campaign donors, politicians and other luminaries 2,200 tickets to the ceremony in the historic DAR Constitution Hall, the ornate auditorium near the White House that was once the center of classical music in the capital. The public address system played John Philip Sousa marches as they filed through the doors.

An array of elderly people, many flown by the White House staff to Washington from around the country, sat grinning and applauding in bleacher seats behind the president, where they were in full view of the television cameras. Many of the women wore fire-engine red coats or tops, ensuring that people would notice this was a mixed audience, not all male like the one that grouped around the president last month when he signed the bill restricting some abortions.

Over the president’s head was a blue banner with a large “Rx” and the words “Keeping Our Promise to Seniors.”

“You are here to witness the greatest advance in health care coverage for America’s seniors since the founding of Medicare,” Bush declared.

“Our government is finally bringing prescription drug coverage to the seniors of America,” he said, and “giving older Americans better choices and more control over their health care.”

Democrats immediately assailed the legislation. At a rally on Capitol Hill of labor leaders, representatives of the elderly and liberal lawmakers, the Democrats declared that the president’s legislation was a sham that would destroy the venerable program. They maintained that theirs was the only party that could be trusted to protect Medicare.

“Who do you trust?” Sen. Edward M. Kennedy, D-Mass., shouted. “The HMO-coddling, drug company-loving, Medicare-destroying, Social Security-hating Bush administration? Or do you trust Democrats, who created Medicare and will fight with you to defend it -- every day of every week of every year?”

In an interview later, Kennedy said he had been busy and had not watched the signing ceremony.

The Medicare program, created in 1965, is one of the gemstones of President Lyndon B. Johnson’s Great Society. It provides health insurance for 40 million elderly and disabled Americans and is one of the most popular government programs ever developed.

Bush hopes that by fulfilling a promise he made in his 2000 campaign and securing the biggest new benefit since the program was enacted, at an estimated cost of $400 billion over the next 10 years, he will at least neutralize a big political advantage Democrats have enjoyed for more than 35 years.

The tactic was similar to one used by President Bill Clinton before the 1996 election, when he diminished a traditional Republican political advantage on welfare by signing a law that required most poor people to work if they wanted government assistance.

Democrats are banking on the belief that the Bush strategy will backfire and that elderly people will become disenchanted when they learn that the new Medicare drug benefit, which will not become effective until 2006, is not nearly as generous as many had hoped. For instance, based on existing drug prices, someone with $5,000 in annual drug expenses would have to bear 70 percent of the cost, with Medicare paying only 30 percent.

Bush emphasized these four elements of the massive legislation:

¶ Insurance coverage that for a premium of about $35 a month, and after a deductible of $250, will cover 75 percent of the cost of prescription drugs up to $2,250 each year and 95 percent of drug costs after patients have spent $3,600 out of pocket.

¶ “More health care choices,” so that elderly people can choose to drop the conventional Medicare program and join private managed care plans subsidized by the government.

¶ Medicare coverage of routine physical examinations.

¶ Health savings accounts that would allow Americans to buy high-deductible health insurance and set money aside in tax-free savings accounts to meet medical expenses not paid for by their insurance.