Bush offers health plan for seniors

ALLENTOWN, Pennsylvania (CNN) -- Republican presidential candidate George W. Bush announced details Tuesday of his health plan for seniors, a $158 billion program Bush said would strengthen Medicare, help seniors pay for all or part of Medicare premiums and subsidize prescription drug costs.

"Medicare is an enduring commitment of our country, but it must be modernized for our times," Bush said. "We will work to modernize Medicare, but we will not wait to help seniors without prescription drugs."

Perhaps not coincidentally, the Democratic National Committee unveiled an advertisement Tuesday criticizing the Texas governor for his record on children's health insurance and education.

Bush's plan will sharpen the debate over health care between the GOP nominee and Democratic rival Al Gore, who has proposed spending an estimated $253 billion over 10 years to add a prescription drug benefit to Medicare, the federal health program for elderly and disabled Americans.

Bush announced his proposal at a campaign stop in Allentown, Pennsylvania. In Washington, meanwhile, Democrats are releasing a television ad to "emphasize the issue of children's health care and concerns about the Bush administration's failure to cover more than one million children in Texas," the DNC said in a news release.

The 30-second spot opens with a narrator saying, "George Bush says he has a plan to improve children's health care. But why hasn't he done it in Texas?"

Bush proposes to spend $110 billion over 10 years to modernize Medicare and give $48 billion to states over the next four years to help seniors pay for prescription drugs

The DNC said it can show that as governor Bush fought efforts to expand coverage of children in Texas, the state that ranks second-worst in the nation in both the rate of uninsured children (24 percent) and the number (1.4 million).

And, though Bush did approve health-care reforms covering children, "the governor fought us tooth and nail," the DNC quoted state Rep. Elliott Naishtat, D-Texas, as saying.

Bush's three-part plan for seniors would provide immediate drug coverage to low-income earners, shore up the solvency of the Medicare program over the coming decade and offer seniors a menu of health-care plans from which to choose, said Bush campaign adviser Ari Fleischer.

All of those plans would include at least some prescription-drug coverage.

The immediate drug benefit -- called Immediate Helping Hand -- would make prescription drugs available without charge to seniors who earn less than about $12,000 per year, or 135 percent of the poverty level.

The cost of pharmaceuticals would be subsidized, on a sliding scale, for seniors who earn more. The benefit would pay 25 percent of drug costs for seniors who earn 175 percent of the poverty level or more, Fleischer said.

Clips from the Democratic National Committee's advertisement criticizing Bush for his record on children's health insurance and education

The poverty level for someone over age 65 living alone is $7,991 per year. For two people over age 65, it is $10,080, according to the U.S. Census Bureau.

The program was described by Bush aides as a stopgap to help seniors while Congress works out the details of an overall Medicare reform package that would also contain a prescription-drug benefit.

Immediate Helping Hand would cost $48 billion over four years, would be administered by the states and would kick in almost immediately after Bush takes office, Fleischer said. A similar program is already offered by 22 states.

The second part of the Bush plan, called Fundamental Medicare Reform, would phase in, starting in 2002, and would give seniors the choice of several health insurance plans, including private plans. The menu offered would be modeled after the options currently available to federal employees.

The current Medicare plan would be one of those offered, Fleischer said, though it would be bolstered with a prescription-drug option.

Every senior, no matter the income level, would receive some prescription-drug subsidy. As in the stopgap plan, seniors making less than 135 percent of the poverty level would pay nothing for full coverage.

For those earning between 135 percent and 175 percent of the poverty level, the benefit would drop, from 100 percent to 25 percent. All seniors at higher-income levels would receive a 25 percent subsidy for prescription drugs.

In addition, a catastrophic benefit, to be called Stop-Loss Coverage, would cap the amount a senior would have to pay for medical expenses in any given year at $6,000. The feds would pick up the rest.

Bush staffers touted the plan as a simplification of Medicare, in that it would require seniors to pay only one premium. Under Medicare's current structure, several premiums can be required.

The Bush plan envisions no changes in age of eligibility and no increase in payroll taxes.

Bush spokeswoman Mindy Tucker said Bush would attempt to speed the Medicare reform through Congress by the end of 2001, faster than Gore's incremental approach, which would take several years to phase in.

In addition to the $48 billion for the immediate prescription aid during the first four years, the cost of the Medicare plan would be $110 billion over 10 years, Tucker said. The budget surplus would pay for the plan, which would not necessitate an increase in the payroll tax, she said.

Under the Gore plan, the prescription drug benefit would be capped at 50 percent for people earning well above the poverty line.

Medicare enrollees would be able to change plans every year.

The vice president is promoting a $253 billion plan over 10 years that would provide a prescription drug benefit as an option under Medicare. It would pay half the cost of prescription drugs, up to a maximum of $5,000 per year.

Gore has also said he would alter the program so that people 55 to 65 years of age could buy into it.

CNN's Beth Fouhy and Pat Neal contributed to this report.