WASHINGTON (AP) – Legislation to remake Medicare cleared critical hurdles at both ends of the Capitol Thursday night as the Republican-controlled House and Senate marched toward approval of bills to provide prescription drugs for seniors while giving private insurance companies a broad new role in the program.

“Today we will take the first steps in creating the next generation of health care,” said Rep. Deborah Pryce, R-Ohio, and on that, there was no dispute.

The House debate was sharply partisan as Democrats attacked a GOP-crafted bill as an attempt to privatize Medicare and donned black armbands as if mourning the program’s demise. “It’s a sham,” charged Rep. Fortney Stark, D-Calif.

“I find it amazing that they go back to the same old scare statements,” retorted Rep. Bill Thomas, a California Republican and key architect of the bill that combined the drug benefit with a new managed care option that seniors could select instead of traditional Medicare.

The Senate proceedings – on a different, bipartisan measure – were far more collegial, punctuated by a 71-26 vote to divide the bill’s remaining $12 billion evenly between priorities favored by Republicans and Democrats.

“We simply can’t allow the perfect to be the enemy of the good,” said Senate Democratic Leader Tom Daschle of South Dakota, announcing his intention to vote for the measure.

Already, Senate Majority Leader Bill Frist, R-Tenn., was looking ahead to negotiations on a final compromise. “I’m confident we can have a very good product” on President Bush’s desk, he said, although he declined to estimate how long that would take.

To help shore up conservative support, House GOP leaders pushed through a companion measure in the hours leading up to the Medicare debate. It would allow some individuals to defray the cost of health insurance and prescription drugs with tax-free dollars accumulated in special savings accounts. The bill would cost $174 billion over the next decade, and passed 239-191, along party lines.

Many conservatives have expressed concern that the bill created a new government benefit program, yet failed to include the type of free-market competition they favored to modernize the program and shore up its finances.

While the bills differed widely in their details, they envisioned the most fundamental changes in Medicare since its creation during the Great Society of nearly four decades ago.

Beneficiaries would have access to prescription drug coverage, with plans to be offered by private insurance companies and partially subsidized by the government. Lower-income older people would receive greater help from the federal government with the cost of their drugs.

The drug coverage would begin in 2006. Until then, discount cards would be available that Republican officials said would reduce costs of prescription medicine by 15 percent or more.

Additionally, private companies would be invited to provide an alternative to traditional Medicare for overall health care. The legislation envisions establishment of a series of regional preferred provider organizations, or PPOs, along the lines of insurance plans that now cover millions of working people.

Medicare beneficiaries could retain their existing coverage or switch. The government subsidy for their drug coverage would be the same, regardless of which plan they chose.

The prescription drug issue has fostered little but political gridlock in recent years, when the Republican-controlled House twice passed legislation and the closely divided Senate deadlocked.

This time, though, Republicans sensed an opportunity with Bush applying pressure on an issue that House Speaker Dennis Hastert, R-Ill., long has favored, and that is important to Frist, a surgeon. With Republicans agreeing to spend $400 billion over 10 years, some Democrats in the Senate concluded it was time to seek agreement.

In the House, that meant continued partisan warfare as Democrats attacked the GOP legislation sharply in the run-up to the vote.

One provision, in particular, sparked their criticism. Beginning in 2010, the legislation would base the government’s subsidy for PPO plans on the bids submitted by private insurers rather than on the cost of providing the services included in traditional Medicare.

“I did not come to Congress to privatize Medicare,” said Rep. Rosa DeLauro, D-Conn.

“This is a very sad day for seniors in Medicare,” said House Democratic Leader Nancy Pelosi, D-Calif. She said Republicans were advancing legislation that “will unravel Medicare” and demanded that the administration release information she said would show that older people would face rapidly increasing premiums if one provision in particular took effect.

Republicans said nothing of the sort was happening and that their changes were essential to modernize Medicare while helping improve its financial standing in advance of the retirement of the post-World War II baby boom generation.

“Our proposal, which guarantees all seniors affordable and voluntary prescription drug coverage under Medicare, lifts the financial burden off their backs so they can stay well and improve their quality of life,” Hastert said.

AP-ES-06-26-03 2145EDT

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