Bush’s Medicare Rx Drug, Tax Credit Proposals Likely to Face Resistance in Congress, CQ’s Goldreich Predicts

President Bush's "ambitious" proposals to cover prescription drugs for low-income seniors and provide health coverage to the uninsured through tax credits are unlikely to pass Congress, as lawmakers not only will have difficulty finding funds to pay for the proposals but also may view the changes as not broad enough, Congressional Quarterly senior reporter Samuel Goldreich says in this week's "Congressional Quarterly Audio Report." Bush's Medicare proposal would allocate $190 billion over 10 years to reform the program, including $77 billion in short-term grants to states to provide prescription drug coverage to low-income seniors ("Congressional Quarterly Audio Report," 2/4). States could provide prescription drug coverage to Medicare beneficiaries with annual incomes between 100% and 150% of the federal poverty level, or between $11,610 and $17,415 for a couple. The federal government would cover 90% of the cost of the program; states, which would administer and determine eligibility for the program, would cover the remaining 10% (Kaiser Daily Health Policy Report, 1/29). The administration also backs adding a comprehensive prescription drug benefit to Medicare, projecting such a plan could come on line by 2006. Last year, however, Bush supported spending $300 million to overhaul Medicare and adding a comprehensive drug benefit by 2004. The bottom line, Goldreich says, is that Bush "wants to delay the full-blown program until he can get out from under the overall budget deficit created by the recession, the war on terrorism and his tax-cut plan." But Congress is unlikely to pass the proposal in its current form, Goldreich says: Most lawmakers continue to support a broader drug benefit, and "everyone" -- from Senate Majority Leader Tom Daschle (D-S.D.) to House Speaker Dennis Hastert (R-Ill.) -- "says that Bush has to come up with a lot more money" to fund prescription coverage for seniors.

Tax Credits
Bush's proposal for the uninsured would use $89 billion over 10 years to provide tax credits for workers who do not have employer-sponsored health coverage. Those with credits would be able to buy coverage individually or through employer plans or public health purchasing pools ("Congressional Quarterly Audio Report," 2/4). Under the proposal, families with annual incomes less than $25,000 would qualify for a $3,000 tax credit. Families with annual incomes between $25,000 and $60,000 would qualify for a smaller tax credit based on income. Individuals with annual incomes less than $15,000 would qualify for a $1,000 tax credit. Individuals with annual incomes between $15,000 and $30,000 would qualify for a smaller tax credit based on income (Kaiser Daily Health Policy Report, 1/31). Goldreich notes that "something like this could pass [Congress] because it's a more generous plan than in the past." Nevertheless, he adds, many Democrats "remain committed to opposing" the use of tax credits for health coverage and are likely to argue that "whatever Bush gets through in tax credits" should be matched with "an expansion in direct aid" through Medicaid or the CHIP program. Goldreich's full report is available online ("Congressional Quarterly Audio Report," 2/4).