Bush Meets With House Members To Discuss Medicare Reform Legislation

President Bush yesterday held two meetings with House members to gather support for the House Medicare legislation, the New York Times reports. Bush said, "Whatever amount of energy and effort is required from the White House, we will provide it, to get a bill done this summer, one that I can sign" (Pear/Toner, New York Times, 6/26). The current House plan would expand the participation of private health plans and give all beneficiaries a drug benefit. Beneficiaries beginning in 2006 would have access to a stand-alone drug benefit for which they would pay a $35 monthly premium and a $250 annual deductible. The plan would cover 80% of beneficiaries' drug costs from $251 to $2,000 per year, after which there would be a gap in coverage before catastrophic coverage would take effect. The amount that a beneficiary would pay before qualifying for catastrophic coverage would be determined on a sliding scale based on income. Individual beneficiaries with annual incomes of $60,000 or more would have to pay more before catastrophic coverage began. Most beneficiaries would qualify for catastrophic coverage after spending $3,500 out of pocket per year. The bill would raise the deductible beneficiaries pay for physician services and would include new preventive care coverage options, such as a free physical for each beneficiary. The bill also would establish direct price competition between traditional Medicare and private health plans beginning in 2010 (California Healthline, 6/24). Bush, joined by Vice President Dick Cheney, HHS Secretary Tommy Thompson and House Speaker Dennis Hastert (R-Ill.), met with about 12 Republicans (Fagan, Washington Times, 6/26). According to the Los Angeles Times, the group of Republicans told Bush they are opposed to creating an equal drug benefit for all beneficiaries -- which some have called an "open-ended new entitlement" -- without also approving cost controls that would maintain Medicare's solvency. Rep. Mike Pence (R-Ind.) said that Bush defended the House proposal by saying that it contains enough structural reforms to contain long-term costs (Hook, Los Angeles Times, 6/26). The AP/Detroit Free Press reports that the Republican group also criticized proposed cuts to Medicare payments to oncologists, reductions in projected spending for hospitals and a provision that would raise costs for beneficiaries who require home health care. Hastert said, "We're working on it" (Espo, AP/Detroit Free Press, 6/26). In his meeting with the Democrats, who are pushing for increased payments to rural Medicare providers, Bush said, "This is the best rural package you guys are ever going to get," according to Rep. Collin Peterson (D-Minn.) (Rogers, Wall Street Journal, 6/26).

After the two meetings, Bush said, "There's good momentum on the side of those of us who believe that we have an obligation to serve something greater than ourselves or our political parties. Then we can all go back to our districts -- in my case, tour the country -- and say we have accomplished a major objective" (Hirschfeld Davis, Baltimore Sun, 6/26). But the Bush administration's attempts to gather support for the House bill might have "fallen short," the Washington Times reports. A House Republican aide yesterday said that a "substantial number" of GOP House members plan to vote against the proposal (Washington Times, 6/26). Several Republican representatives interviewed by the New York Times, including Reps. Charlie Norwood (Ga.), Sue Myrick (N.C.) and John Culberson (Texas), said they are undecided on how they would vote (Pear/Toner, New York Times, 6/26). Rep. Jim DeMint (R-S.C.) predicted the bill will pass in the House because House GOP leaders will "get enough votes on the Democrat side to offset what they'll lose on the Republican side." House Energy and Commerce Chair Billy Tauzin (R-La.) said that Republicans who are criticizing the House proposal are missing their opportunity to reform Medicare, adding, "Just say no to this chance. ... The Democrats will pass it, and it will be a total government program that will cost a trillion" (Washington Times, 6/26). In the meantime, House Republican Whip Roy Blunt (R-Mo.) led an "intensive daylong effort" to educate Republican House members on the intricacies of the proposal (New York Times, 6/26). The House is expected to approve the proposal today, but the vote could be pushed back until tomorrow as GOP leaders continue to lobby wary Republicans, the Los Angeles Times reports (Los Angeles Times, 6/26). CNN's "Inside Politics" yesterday reported on the meetings. The segment includes comments from Hastert, Pence, Rep. Charles Rangel (D-N.Y.) and AFSCME President Gerald McEntee (Karl, "Inside Politics," CNN, 6/25). The full transcript of the program is available online.

Meanwhile, House GOP leaders, Tauzin and Ways and Means Committee Chair Bill Thomas (R-Calif.) have come to an agreement on several differences in the Medicare proposals that the Ways and Means and Energy and Commerce committtees approved separately, CongressDaily reports. Tauzin yesterday said House leadership has accepted a provision approved by Energy and Commerce that would end a system under which physicians administering medications to beneficiaries in their offices receive 95% of the average wholesale price of the drug. Some health policy experts have contended that the AWP is inflated and that physicians are often overpaid for administering medications, CongressDaily reports. CongressDaily reports the final House Medicare bill also will include home health provisions adopted by the Ways and Means Committee and a proposal by some Republican members of the Energy and Commerce Committee that would create a drug debit card for two years until the drug benefit is implemented. The final House bill also will include a provision to allow the reimportation of U.S.-made medications from foreign nations, where they are often cheaper, and a measure that would ease market entry of generic medications (Heil, CongressDaily, 6/25).

Democrats yesterday protested a Bush administration decision to withhold a report from CMS Chief Actuary Richard Foster about the House bill's financial impact, the Journal reports (Wall Street Journal, 6/26). Two weeks ago, Rep. Pete Stark (D-Calif.), ranking member of the House Ways and Means Health Subcommittee, requested the analysis. A Stark aide said that Foster on Tuesday said that the analysis was completed, but that he was being forbidden to release it by CMS Administrator Tom Scully. "Tom Scully told my staff that [Foster] would be fired so fast his head would spin if he released this information to us," Stark said in a release. Scully told the Associated Press, "They don't have the right on the Hill to call up my actuary and demand things," adding that he would release the analysis "if [he] feel[s] like it." According to language in the 1997 Balanced Budget Act states, the CMS actuary "has a unique role within the agency in that it serves both the administration and Congress," and "the independence of the Office of the Actuary with respect to providing assistance to Congress is vital" (Rovner/Fulton, CongressDaily, 6/25). CMS spokesperson Peter Ashkenaz said the analysis has not been released because Foster is still working to update it based on changes lawmakers are considering (Booker, Richmond Times-Dispatch, 6/26). Meanwhile, the Bush administration yesterday released an HHS report estimating the House bill would reduce Medicare beneficiaries' drug costs by approximately 25% because of expected competition among private health plans to negotiate for lower drug prices (Lipman, Atlanta Journal-Constitution, 6/26).

The Senate yesterday continued to debate its Medicare bill (S 1) (Rovner, CongressDaily/AM, 6/26). The Senate bill calls for increased participation by private plans in Medicare and would give all beneficiaries an equal drug benefit beginning in 2006. Beneficiaries would pay a $275 annual deductible and an estimated $35 average monthly premium for the drug coverage, which they could obtain by remaining in traditional Medicare and enrolling in a stand-alone private drug plan or by choosing a new coverage option called "Medicare Advantage." Either way, beneficiaries would pay half of their annual drug costs from $276 to $4,500 and all drug costs between $4,501 and approximately $5,800. After about $5,800, beneficiaries would be required to cover 10% of their drug costs, with Medicare paying the remainder. Under the new coverage option, private plans would offer coverage for catastrophic health expenses and preventive care services in addition to the required Medicare benefits, giving beneficiaries an incentive to move out of traditional Medicare and into a private plan. The government itself would provide a drug benefit through a contractor only in areas in which drug-only health plans decide not to participate (California Healthline, 6/25). Yesterday, the Senate took the following actions:

• Senators voted 56-39 to defeat an amendment proposed by Sen. Dick Durbin (D-Ill.) that would have replaced the private-sector drug benefit in the current proposal with a government-delivered benefit and would have had the HHS secretary negotiate prices with drug makers (CongressDaily/AM, 6/26).
  
  
• The Senate approved on a 94-1 vote an amendment by Sens. Olympia Snowe (R-Maine), Jeff Bingaman (D-N.M.) and Orrin Hatch (R-Utah) that would ensure community health centers would continue to receive cost-based Medicare reimbursements, as opposed to capitated reimbursements.
  
  
• Senators voted 69-26 to defeat an amendment proposed by Sens. John Edwards (D-N.C.) and Tom Harkin (D-Iowa) that would have made market entry more difficult for new medicines that treat diseases for which similar treatments already exist. The amendment also would have required makers of such drugs to compare their effectiveness to other available treatments in the companies' direct-to-consumer advertisements.
  
  
• The Senate defeated an amendment proposed by Sen. Chris Dodd (D-Conn.) that would have eliminated the gap in drug coverage between $4,501 and $5,800 in the current proposal for beneficiaries whose annual incomes are less than 250% of the federal poverty level.
  
  
• Senators voted down an amendment proposed by Sen. Bob Graham (D-Fla.) that would have allowed beneficiaries not to pay drug benefit premiums during the coverage gap (Rovner, CongressDaily, 6/25).
  
  
• The Senate defeated an amendment by Sen. Hillary Rodham Clinton (D-N.Y.) that would have established drug benefit comparisons to assist beneficiaries in choosing the "best and least costly" coverage (Povich/Hoy, Long Island Newsday, 6/26).

The Senate last night also reached final agreement on how to spend an unallocated $12 billion in its $400 billion, 10-year plan, CongressDaily/AM reports. Under the agreement, the funds would go to two separate, five-year demonstration projects between 2009 and 2014. The HHS secretary would use $6 billion for a plan suggested by some Republicans to designate certain regions of the nation to test a new competitive bidding system for private plans participating in Medicare. The remaining $6 billion would go to test a plan by some Democrats to add Medicare fee-for-service coverage for preventive and chronic care in some regions. Under the final compromise, authorization for both programs would continue after 2014, although funding would end. Senate Finance Committee Chair Charles Grassley (R-Iowa) said, "I think we have a compromise for those folks that want to make sure that fee-for-service is strong. We have a compromise for those who feel that our underlying legislation has not done enough to enhance competitiveness and get people into [preferred provider organizations]." The Senate today is expected to address an amendment by Sens. Dianne Feinstein (D-Calif.), Don Nickles (R-Okla.), Lincoln Chafee (R-R.I.) and Lindsey Graham (R-S.C.) that would require Medicare beneficiaries with incomes higher than $75,000 per year for an individual and $150,000 per year for a couple to pay higher premiums for Medicare Part B, which covers outpatient services. Currently, all beneficiaries pay a $58.70 monthly premium for Part B, which covers 25% of the program's costs. Under the proposal, beneficiaries with annual incomes between $75,000 and $100,000 for an individual and $150,000 and $200,000 for a couple would pay a premium equal to 50% of the program's costs. Individual beneficiaries with incomes above $100,000 per year and couples with incomes above $200,000 per year would be required to pay the full amount of Part B costs (CongressDaily/AM, 6/26).

• Des Moines Register: Grassley yesterday said the pace of debate on Medicare reform legislation "will have to slow down" so that senators can better understand the proposals, the Des Moines Register reports. Grassley said he expects the Senate to approve its Medicare bill as early as today. However, he said that when senators return after the July 4 recess, it could take longer than earlier predicted for the House and Senate bills to move through conference committee. "There is a feeling in our caucus we should be fairly deliberate reaching compromise with the House," Grassley said. Grassley said the conference committee may not reach a compromise until September, but added that he is confident a bill will reach Bush's desk before the end of the year (Norman, Des Moines Register, 6/26).
  
  
• New York Times: The Times today examines seniors' reactions to current Medicare reform proposals being debated by Congress (Gay Stolberg, New York Times, 6/26).
  
  
• Washington Post: The Post today features interviews with seniors at two senior centers in Cleveland regarding the current Medicare proposals (Connolly, Washington Post, 6/26).
  
  
• Washington Times: The Times today looks at how the cost of many entitlement programs in the past have exceeded expectations. According to researchers who have studied previous health care entitlement programs, the costs of those programs are "inevitably higher than predictions," according to the Times. "We can expect the same thing here," Robert Bixby, executive director of the Concord Coalition, said (Dinan, Washington Times, 6/26).