Despite the harsh partisan rhetoric that attended the launching of rival Medicare plans last week, beneath the surface there’s surprising optimism that a prescription drug benefit for seniors might be enacted into law this year. [IMGCAP(1)]

When President Bush unveiled his outline of a revised plan to reform the Medicare system as well as provide some drug assistance to all seniors, it was denounced by Sen. Edward Kennedy (D-Mass.) as “a sham and a hoax.”

Senate Minority Leader Thomas Daschle (D-S.D.) declared that “once again, the president will coerce seniors out of Medicare and into HMOs” and served notice that Democrats are united around the idea of “a comprehensive benefit under Medicare” — that is, no private-sector reform.

House Minority Leader Nancy Pelosi (D-Calif.) put out her own no-reform proposal giving all seniors regardless of income a generous drug benefit at a cost she estimated at $800 billion over 10 years though Republicans put it at $900 billion to $1 trillion.

Bush said his plan, budgeted at $400 billion, was based on “giving seniors a choice” of health plans much as Members of Congress and federal employees have.

He contrasted his vision with one — clearly he meant the Democrats’ — in which “the federal government decides care, the federal government rations care, the federal government dictates coverage.”

Despite the yawning gap in ideology and money, various players in the Medicare battle are expressing optimism that, at long last, Congress might quit using prescription drug coverage as a campaign issue and actually pass a bill.

Kennedy staffers said their boss rates the chances at “more than 50-50.” Rep. Billy Tauzin (R-La.), chairman of the Energy and Commerce Committee, put the odds at “better than 50-50.” So did Alan Holmer, president of the Pharmaceutical Research and Manufacturers of America, and Thomas Scully, head of the federal agency that manages Medicare.

John Rother, policy director of the AARP, put the chances at “50-50” but added, “I’m optimistic.” The most optimistic player of all was Health and Human Services Secretary Tommy Thompson, who rated the chances at an astounding “80-20 — if it happens this year.”

The optimism is based primarily on the assumption that seniors — representing a key swing voting block — are fed up with Congress’ past promises of a drug benefit and failure to deliver.

Various players said the pressure is especially felt by Republicans because they’re in charge of both chambers of Congress and the White House and will get most of the blame if no benefit gets passed.

Indeed, House Republicans are planning to pass a bill by Memorial Day, and Senate Majority Leader Bill Frist (R-Tenn.) wants the Senate to act by July 4 so that a conference report could be completed by year’s end.

“The key is Senate Democrats,” said Rother. “Will they really block a bill just to keep a campaign issue alive?”

Tauzin agreed that “Senate Democrats have to choose — do they want to stand in the way of a benefit and risk the political consequences? My sense is that seniors get it now — that some people just want to use this as a political issue.”

Democrats do stand in an advantageous legislative position. Most everyone expects that Medicare — involving a permanent financial commitment — cannot be processed under budget reconciliation rules requiring just 51 votes, but will have to pass with 60, requiring support from at least nine Democrats.

To get 60 votes, various health lobbyists and Congressional aides expect that Republicans will have to substantially scale back on Bush’s plans for substantial Medicare reform.

Bush wants a three-tiered Medicare system that gives seniors the option of staying in the current fee-for-service Medicare and get a limited drug benefit or transfer into two other private plans, one based on preferred-provider networks and the other on HMOs with more-generous drug coverage.

“Bush’s plan is DOA,” one lobbyist put it. “He put it up there as a rhetorical exercise to fulfill his campaign promises, but Congress is going to write the plan.”

Lobbyists expect that Ways and Means Chairman Bill Thomas (R-Calif.) will produce a drug benefit bill much like the one the House passed last year, containing limited reforms.

They expect the Senate Finance Committee eventually to produce a bill similar to last year’s so-called “tripartisan” measure sponsored by Republican Olympia Snowe (Maine), Democrat John Breaux (La.) and Independent Jim Jeffords (Vt.).

That measure offered a drug benefit to all seniors and embodied reform only in the sense that the benefit — as opposed to all other Medicare services — would be processed through private insurance carriers.

Frist and other Republicans on the Finance Committee strongly favor Bush-style Medicare reforms — both as a matter of principle to introduce choice and private insurance competition into the system and to prevent the system from going bankrupt as baby boomers retire.

But they have a political imperative to get 60 votes on the Senate floor. Kennedy and the tripartisan group nearly reached a deal last year before GOP stinginess and Democrats’ desire for a campaign issue ended the talks.

This year, though, the chances are better.