House Republicans Demand Free-Market Medicare

Published August 1, 2003

Forty-four House Republicans have promised to beach President George W. Bush’s Medicare prescription drug plan if it does not include free-market reforms.

They say the drug benefits will cost too much and drive Medicare even closer to insolvency. The Congressional Budget Office has estimated the bill will cost $400 billion over the first 10 years.

“It’s not clear how expensive it’s going to be, and it’s going to further aggravate the long-term liability of Medicare, and will require huge tax increases in the future on our children and children’s children to pay for this benefit,” said Michael Franc, an expert on congressional procedure at The Heritage Foundation.

In a July speech to Miami seniors, Bush said, “Medicare does not have prescription drug benefits, as you know. We’ve got to change that. If medicine is changing, we want Medicare to change with it, on behalf of the senior citizens all across the country.”

And while Republicans agree, they are concerned the President’s proposal will be too expensive. They predict that once the government subsidizes drug coverage, demand will increase and costs will exceed all expectations.

One-Vote Margin

The Medicare bill passed in the House by one “yea” late in June after members pulled an all-night session.

Following the vote, the 44 House Republicans, including many who had voted for the bill, wrote a letter to House Speaker Dennis Hastert (R-Illinois), threatening to kill any final Medicare drug bill unless it clearly allows for free-market competition.

One of the signatories, Representative Pat Toomey (R-Pennsylvania), said, “It’s an absolutely critical issue and it is a make-or-break for many of us, because the fact is, in its current form, Medicare is on the road to bankruptcy. We need to make some substantive reforms.”

The letter to Hastert also stated, “Should this reform be removed or weakened, we cannot as a matter of responsible public policy support a bill to add a prescription drug benefit to Medicare which would accelerate the insolvency of this vital program.”

The Senate version of the measure contains no free-market competition provisions. A bill reconciled between the House and Senate must pass both chambers before heading to the President’s desk.

The Republicans say they want to give Medicare recipients the right to buy alternative health coverage outside of Medicare starting in 2010. The goal is to give seniors the same medical coverage options members of Congress now enjoy with the Federal Employees Health Benefits Program (FEHBP).

Senator Ted Kennedy (D-Massachusetts) has stated he opposes free-market reforms and is banking on getting his way in the final reconciled bill. As a matter of record, Kennedy is opposed to privatizing any aspect of the Medicare program.


The discontent among House Republicans challenges the President’s top legislative priority and an important part of his strategy to gain domestic policy support in advance of his bid for re-election. Eventually, since Bush can’t have it both ways, the White House will have to choose between Senate Democrats and House Republicans. Just when all this will come together is difficult to predict.

Tom Miller, director of health policy studies at the Cato Institute, told Health Care News, “A conference report will not be finished before early September. There is a 50-50 chance the House will vote down the original version of the conference report when it comes back from the House-Senate committee.”

Miller also said, “I then expect a revised version of the conference report, which then would move closer to the somewhat better aspects of the House bill, to finally be approved after a lot of tugging and pulling, before the end of September at the earliest, and in early November at the latest.”

Conrad F. Meier is managing editor of Health Care News. His email address is [email protected].