Bush Administration Withheld Information About Cost of New Medicare Law, Two Democratic Lawmakers Say
At a Senate Finance Committee hearing on President Bush's proposed fiscal year 2005 budget, Sen. Max Baucus (D-Mont.), one of the two Democrats who was involved in negotiations over the Medicare law (HR 1), on Wednesday said that the Bush administration last year "withheld information" about the new legislation's estimated cost, the AP/Philadelphia Inquirer reports (Sherman, AP/Philadelphia Inquirer, 2/5). Administration officials have said that according to the Office of Management and Budget, the legislation will cost $534 billion over the next 10 years, $134 billion more than estimated by the Congressional Budget Office. The budget Bush released Monday acknowledges the new estimate (California Healthline, 2/4). Baucus said that the higher estimate was "never raised by the administration in conference, never raised in the room. Never." However, he said that despite those criticisms, he remains supportive of the new law and does not favor the major revisions proposed by other Democrats, according to the AP/Inquirer. Sen. Kent Conrad (D-N.D.) said, "The bill would not have passed if it were known that it would cost $530 billion instead of less than $400 billion" (AP/Philadelphia Inquirer, 2/5). Sen. Chuck Grassley (R-Iowa), speaking to Iowa reporters Wednesday, also addressed the difference in estimates, saying the disparity resulted from "Medicare officials ... refus[ing] to meet with congressional budget experts," according to the Des Moines Register. He said CMS officials would not communicate with Congress and added that his staff was "rebuffed in several attempts to hold discussions" with CMS budget experts about the estimates, the Register reports (Norman, Des Moines Register, 2/5). HHS Secretary Tommy Thompson, who also testified before the Finance Committee, told Baucus, "You said I was not forthcoming. I take umbrage to that." Thompson said that the Bush administration provided financial information on the bill, but the final cost projection could not be completed until late December because of "last-minute changes to the bill," according to the AP/Inquirer. Sen. Jon Kyl (R-Ariz.) said, "Why on earth would it be in the administration's best interest ... to hide the higher number?" (AP/Philadelphia Inquirer, 2/5).
Sens. Olympia Snowe (R-Maine) and Ron Wyden (D-Ore.) on Thursday plan to introduce legislation designed to "make major changes" to the Medicare law, CongressDaily reports. The Medicare Enhancements for Needed Drugs Act, or MEND Act, seeks to repeal a provision in the law that prohibits the federal government from negotiating directly with pharmaceutical companies for lower prices on medications. The legislation also would offer incentive payments to private insurers that negotiate significant medication discounts. Another provision would seek to prevent pharmaceutical companies from reducing the supply of medications they export to foreign nations in an effort to prevent U.S. residents from purchasing cheaper drugs abroad. The legislation also would eliminate pharmaceutical companies' ability to deduct advertising expenses from their taxes if they threaten to withhold supplies from foreign companies that sell to U.S. residents, a technique currently used by a half-dozen firms. Thompson on Wednesday reiterated the Bush administration's position that it "would rather not have the bill opened up this year" (Rovner, CongressDaily, 2/5).
The House Committee on Standards of Official Conduct on Wednesday confirmed that on Dec. 8, it launched an "informal fact-finding" into bribery accusations related to the November House vote on the Medicare law (CongressDaily, 2/5). In December, retiring Rep. Nick Smith (R-Mich.) said that unnamed Republican leaders promised to donate $100,000 to his son's congressional race in exchange for his support on the Medicare bill. However, Smith later backed away from that comment, saying suggestions that he was bribed are "technically incorrect." He added that some Republican lawmakers had said they would oppose his son's campaign but did not offer to donate any money to the campaign as had been previously reported. Smith voted against the Medicare legislation. In a Jan. 20 letter to House Speaker Dennis Hastert (R-Ill.), House Minority Whip Steny Hoyer (D-Md.) called for an ethics investigation into the allegations (California Healthline, 2/4). Committee Chair Joel Hefley (R-Colo.) and Rep. Alan Mollohan (D-W. Va.) did not indicate if the probe was focused on a particular member (CongressDaily, 2/5). They added that "no further public comment will be made in this matter except in accordance with committee rules" (Pershing/Billings, Roll Call, 2/5). Hefley has dismissed calls for an investigation because he said they are politically motivated. Smith said on Wednesday that he "doubted" that an investigation by the ethics committee would be "productive," according to CongressDaily. "My guess is it's a dead end," he added (CongressDaily, 2/5).
Virginia-based advertising firm National Media, which will be participating in the recently launched television advertising campaign for the new Medicare law also is working on Bush's re-election campaign, the AP/Las Vegas Sun reports. The administration is running $12.6 million worth of advertisements for the Medicare law, and has purchased $9.5 million worth of 30-second television spots to educate beneficiaries about changes to Medicare (Sherman, AP/Las Vegas Sun, 2/4). The spots, which will appear on network and cable television stations nationwide through March, address some criticisms of the law, including assertions that the changes will force beneficiaries out of traditional Medicare and into managed care plans and that the savings from the prescription drug discount cards and benefits will be less substantial than expected. The ads will be paid for out of $1 billion in federal funds set aside to implement changes to the program (California Healthline, 2/4). Bill Pierce, a spokesperson for Thompson, said that National Media has done ad work for Medicare for three years. But critics of the ads say that National Media's involvement is "evidence that the administration is mounting a political rather than educational campaign for the new law," USA Today reports (USA Today, 2/5). Sen. Edward Kennedy (D-Mass.) has asked the General Accounting Office to investigate whether it is legal to use government funds for the ad, and the National Taxpayers Union has called on Bush to pull the ads off the air, calling it "an election-year ploy rather than a genuine public service announcement" (AP/Las Vegas Sun, 2/4). Several Democrats -- including Rep. Charles Rangel (D-N.Y.), Rep. John Dingell (D-Mich.), Rep. Henry Waxman (D-Calif.), Rep. Pete Stark (D-Calif.) and Rep. Sherrod Brown (D-Ohio) -- sent a letter to Thompson, calling the new Medicare advertising campaign misleading. They raised particular concern about the statement that the new law will provide "the same Medicare you've always counted on, plus more benefits," CongressDaily reports (Rovner, CongressDaily, 2/5).
Some health plans and others in the health industry believe that the Medicare legislation "will bring them unprecedented growth in the next few years," the Chicago Tribune reports. Aetna, for instance, plans to offer a Medicare drug discount card program as an "entree to attract seniors" to a private drug plan it intends to offer in 2006, according to the Tribune. David Snow, chief executive of PBM Medco Health Solutions, said, "We are very bullish about a discount drug card. Obviously, an opportunity grows for us." Medco also expects its mail-order business to double to 160 million annual mail-order prescriptions by 2007, with an increased number of Medicare beneficiaries joining private health plans to access the prescription drug benefit, according to the Tribune (Japsen, Chicago Tribune, 2/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.