By Randall Mikkelsen
WASHINGTON (Reuters) - President Bush on Monday signed a $400 billion overhaul of the Medicare old-age health system that adds prescription drug coverage, but Democrats charged older Americans are being shortchanged and polls showed deep doubts among the elderly.
"Our government is finally bringing prescription drug coverage to the seniors of America," Bush said as he signed legislation he hopes will draw more senior citizens into the Republican camp for his re-election campaign next year. Those hopes were cast into doubt by two polls that showed elderly Americans had strong concerns about the measure.
Democrats running for president and in Congress vowed new efforts to expand Medicare and make it an issue in next year's elections.
"We're going to win this battle. We're going to take back our Medicare," Massachusetts Democratic Sen. Edward Kennedy said. Kennedy and U.S. Rep. John Dingell, a Michigan Democrat, plan on Tuesday to introduce proposed revisions to the bill.
The Medicare overhaul adds a prescription drug benefit -- starting in 2006 -- for the 40 million Medicare recipients.
Bush said drug costs will fall "roughly in half" for participants now without drug coverage.
The bill encourages a bigger role for private health insurers -- which Democrats warned could push seniors into health maintenance organizations (HMOs).
Democrats opposed provisions allowing a gap in coverage of drug costs and prohibiting the government from negotiating prices. They warned the bill could trigger cuts in state benefits for the poor and elimination of employer retiree health benefits.
They also want to allow imports of lower-priced drugs from Canada.
SENIORS TURN THUMBS DOWN
The White House defended, as "consumer protection," a provision prohibiting participants from buying supplemental insurance to fill in the gaps in Medicare coverage.
The overhaul was supported by major senior citizens' groups, including the powerful AARP (formerly the American Association of Retired Persons). AARP, faced with member protests, has said it will seek expanded benefits.
"Seniors, beware of Republicans bearing gifts," House Democratic leader Nancy Pelosi of California told several hundred retirees who jammed a large Senate hearing room.
A CNN/USA Today/Gallup poll on Monday showed that 49 percent of Americans surveyed disapproved of Bush's handling of the Medicare issue, while 39 percent approved. Among Americans over 65, majorities were "very concerned" that the bill failed to help seniors enough and is too generous to drug companies.
An ABC News poll found that 47 percent of elderly Americans disapproved of the bill, while 26 percent approved.
Some conservative groups have criticized the bill as a further strain on a federal budget deficit expected to top a record $500 billion this fiscal year.
"Future taxpayers will have to pick up the commitment," the Heritage Foundation said in an earlier analysis.
Bush hopes that by helping to break a long legislative logjam over Medicare reform, he can also break Democrats' reputation as the champion of senior citizens' interests.
Under the bill, older Americans would buy drug coverage policies from private insurers. The government would pay three-quarters of the drugs' cost up to $2,250 a year, after a $250 deductible and a monthly premium estimated at about $35.
There is a coverage gap until a participant has spent $3,600, then the government picks up 95 percent of "catastrophic" costs. Poor elderly would get additional subsidies.
It offers expanded coverage of preventive care and extends tax-sheltered health savings accounts to all Americans.