WASHINGTON (AP) – Just hours after President Bush signed the landmark prescription drug bill into law yesterday, Sen. Edward M. Kennedy, D-Mass., was ready with his legislative response – a bill that would repeal many of the key aspects of the new law.

The measure, which will face an uphill battle, would limit payouts to the private insurance plans to amounts that reflect Medicare’s cost, allow drug reimportation from Canada, and eliminate a limited experimental program that sets up direct competition between traditional Medicare and new private managed care plans.

Kennedy and Rep. John Dingell, D-Mich., plan to introduce the bill today. The measure would also eliminate the gap in the Medicare law – which provides no coverage for drug costs between $2,250 and $5,100.

Under Kennedy’s plan, beneficiaries would pay 75 percent coinsurance in the coverage gap from 2006-2008, and would pay 50 percent in 2009, then 25 percent in 2012.

“Our legislation will protect and preserve Medicare – not turn senior citizens over to the untender mercies of HMOs and insurance companies,” said Kennedy. “It will provide a real prescription drug benefit for senior citizens, without coverage gaps or hidden loopholes.”

The new law signed yesterday morning by Bush enacts the most extensive changes since Medicare’s creation in 1965. It adds a prescription drug benefit beginning in 2006 and encourages insurance companies to offer private plans to millions of older Americans who now receive health care benefits under terms fixed by the federal government.

Beginning next May, the law will also allow seniors to buy a Medicare-approved discount card for $30 or less to help offset the growing costs of prescriptions.

Kennedy led Democratic opposition to the plan, charging it would destroy the Medicare program as it was designed at its inception during the Johnson administration.