The president provided specifics on his drug plan while unveiling proposals for reforming Medicare.

But Democrats in Congress ridiculed the president's proposal as a trivial step to solve a huge problem.

Under Bush's proposal, the federal government would endorse drug discount cards issued by private companies if the private programs met federal standards.

The card sponsors would pool the purchasing power of Medicare beneficiaries to negotiate discounts from pharmacies and drug manufacturers.

Bush unveiled what he described as ``an exciting new plan'' at a brief ceremony in the Rose Garden of the White House.

He invoked the spirit of Lyndon B. Johnson, who signed the law creating Medicare on July 30, 1965.

``The new drug discount plan combines the purchasing clout of millions of seniors to negotiate lower prices than under the current system,'' Bush said. ``Under my plan, participating pharmacies will get new customers, and seniors will get high- quality drugs at a lower price.''

As part of his vision for the future of Medicare, Bush called for a new prescription drug benefit for elderly Americans, a wider choice of private health plans, and looser regulation of the health care industry.

Trying to shape one of the most politically and technically delicate issues before Congress, Bush said the Medicare system should include better coverage for preventive care, new treatments and serious illnesses.

He also proposed that the program give more help to people with unusually large medical bills, for the first time picking up all their health expenses above a certain amount.

At the same time, the president said the program, which provides health insurance to 39 million elderly and disabled Americans, must be put on a ``sustainable financial footing,'' so that it doesn't run out of money when the baby-boom generation becomes old enough to sign up.

The principles Bush laid out are guideposts the administration hopes lawmakers will follow as the Senate and the House begin a fresh round of debate about how to modernize Medicare, the federal health insurance program for the elderly.

``Medicine is constantly improving. Medicare must keep pace,'' Bush said

The drug discount cards are a political gamble for Bush. No one can be sure if they will work. They could amount to no more than the plastic ``health security card'' that President Clinton flashed before the TV cameras when he announced his proposal for universal health insurance.

Bush could reap political gains if the discount cards help significant numbers of Medicare beneficiaries, because the president could take credit for acting while Congress dithers in debate.

AARP, the chief lobby for the nation's elderly, was initially skeptical, but expressed more interest after learning details.

John Rother, chief lobbyist for the AARP, said Bush's initiative, though no substitute for Medicare drug benefits, was ``a worthwhile idea'' that would provide elderly people with more information on drug prices than is now available.

Under the president's plan, Medicare beneficiaries could compare essential features of the different drug card programs, including the prices charged for the most popular prescription drugs purchased at local pharmacies or by mail order.

The five companies that endorsed Bush's plan - Advance PCS, Express Scripts, Caremark, Merck-Medco and Wellpoint - will form a consortium to run the discount program for Medicare.

These companies already manage drug benefits for more than 200 million Americans with private health insurance. They see the Medicare population as a big, attractive market. They could send marketing materials for other services to Medicare beneficiaries who sign up for discount cards.

Democrats in Congress scoffed at the president's proposal. Sen. John D. Rockefeller IV, D-W.Va., said discount cards were already available to any consumer who wanted one.

Rockefeller said the president's proposal was ``laughable, incomprehensible - utterly, absolutely superficial.''

Under the program, card sponsors would line up participating drugstores, establish lists of preferred drugs, fill prescriptions by mail and run telephone call centers to answer questions from consumers.

One plan might cover six diabetes drugs, while another plan covers just one. One plan might charge no enrollment fee, but limit the choice of drugs. Another plan might charge $25, but offer discounts on a longer list of drugs through a larger number of pharmacies.

The largest discounts, up to 40 percent off the typical retail price, would be for generic drugs sold by mail order. Medicare beneficiaries could switch plans twice a year.

About one-third of the 40 million Medicare beneficiaries have no insurance coverage for prescription drugs. This group of 13 million to 14 million people is the prime potential market for drug discount cards.

John M. Coster, vice president of the National Association of Chain Drug Stores, said: ``I don't think it's going to work. It's going to be a serious disappointment to seniors, and it will backfire on the administration.''

Information from The Washington Post was used in this report.