Abstract:
In January 2003, President George W. Bush was finalizing a groundbreaking proposal for Medicare, the federal health insurance program for the elderly. Under the terms of the plan, Medicare would offer a major new benefit: prescription drug coverage--a long-sought but elusive goal for seniors and their advocates. By any measure, this would seem a surprising initiative coming from a politically conservative White House. If approved by Congress, the benefit would represent the largest expansion of Medicare, or of any federal entitlement program, since its enactment almost 40 years earlier. But the Bush proposal also represented a departure from the popular government insurance program--it aimed to inject market forces into Medicare by encouraging beneficiaries to enroll in government-subsidized private health plans that would compete directly with the traditional government-run, fee-for-service program. The drug benefit would be the chief inducement for seniors to make the switch to private plans. For Bush, the stakes were high. During the 2000 presidential campaign, he had pledged to overhaul the Medicare program and to add prescription drug coverage. Seeking to deliver on that promise, Bush had put his Medicare proposal at the top of his domestic agenda for 2003. Even with its emphasis on market-driven solutions, the plan would have to win over conservative Republicans, who resisted the notion of expanding an already large and costly government program, especially in a time of soaring budget deficits. It was also likely to get a cool reception from most Democrats, who viewed private sector competition as the first step in the dismantling of Medicare as an entitlement program. Republicans had the upper hand: for the first time in decades, the GOP controlled not only the White House, but both chambers of Congress as well.
Learning Objective:
This case and its sequel tell the story of the Bush administration's efforts to craft a measure that would achieve its goals and to shepherd it through a balky Congress. Students can be asked to assess the wisdom both of Bush's campaign promise and of the White House's strategy for pursuing it in the altered circumstances of a post-9/11 world.
