President Bush has won a big political victory with Congress voting to change the way older Americans pay for health care.
President Bush calls the legislation a "major victory" in improving health care that will lead to "historic" reforms.
"We inherited a good Medicare system. It has worked but was becoming old and needed help," he said. "Because of the actions of the Congress, because of the actions of members of both political parties, the Medicare system will be modern and it will be strong."
Speaking in the western state of Nevada, Mr. Bush said he will sign the bill into law. It provides for $400 billion worth of changes including prescription drug coverage and competition from private-sector insurers.
Congressional Democrats say the plan is too expensive. They also warn that allowing wealthier people to choose private coverage will weaken Medicare by shrinking the pool of available funds used to subsidize poorer Americans.
Health care is an issue traditionally dominated by Democrats and the passage of the president's plan is sure to feature prominently in his campaign for re-election. The Republican plan won the support of the nation's leading senior group representing 35 million older Americans.
The compromise legislation seeks to ease concerns about favoring wealthier Americans by reducing or eliminating fees lower income seniors to pay for their medicines.