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Last Updated: Friday, 27 June, 2003, 16:48 GMT 17:48 UK
Bush hails Medicare reform
President Bush speaks at American Medical Association National Conference, Washington, 4 March 2003
Bush wants to inject competition into the Medicare system
The US president is celebrating a major legislative victory after Congress approved the biggest overhaul of the country's health care plan for elderly and disabled people since its creation nearly 40 years ago.

Reform of the Medicare system, passed by both houses, reduces the cost of drugs for pensioners and gives them access to a wider range of new medicines.

"Seniors have waited too long for more choices and better benefits, including prescription drug coverage, similar to the kind now enjoyed by federal employees and members of the Congress," President George Bush said in a statement.

"I will continue working closely with Congress during conference to make improvements and pass meaningful Medicare reform."

Fee-for-service: patient can choose any doctor, cost paid by Medicare on a fixed scale
PPO (preferred provider organisation): patient chooses doctor from a list of participants in health insurance scheme who agree to be directly reimbursed
HMO (health maintenance organisation): patient can only get care from specific doctors after authorisation from HMO insurance provider

The two chambers must now hammer out their differences over their respective bills, which centre mainly on the size of the private sector's role.

Mr Bush has said he hopes to sign the $400bn package into law by 4 July, the US Independence Day holiday.

The plan alienated liberal Democrats who said it depended too much on the private sector, and conservative Republicans who had hoped for an even greater degree of privatisation.

"This is the first step that has been specifically designed not to reform the Medicare system as we know it, but to dissolve it," said New York Democratic Representative Charles Rangel.

'Drugs only' policy

The Senate passed its legislation on a 76-21 vote, a sharp contrast to the years of impasse over the program.

The House bill passed by a single vote, 216-215. House leaders extended the customary 15-minute vote for about an hour to eke out that victory.

"Senior citizens will long remember if you voted for them... but they will never forget if you voted against them," said House Speaker Dennis Hastert, an Illinois Republican who had a hard sell to get conservatives to vote with him.

Both bills will give seniors the option of staying in traditional Medicare, and then buying a new "drugs only" policy that would partially cover their costs.

Or they could choose from an expanded menu of private managed-care plans, not all currently available in Medicare, to get all their health care, including drugs.

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