CongressDaily/AM Outlines Issues Yet To Be Resolved in Medicare Negotiations

Although negotiators charged with reconciling the House and Senate Medicare bills (HR 1 and S 1) have addressed a number of "central" issues, including the design of a new drug benefit and drug coverage for those dually eligible for Medicare and Medicaid, they have yet to resolve some of the "most difficult" issues, CongressDaily/AM reports. Those issues are the "least subject to compromise and ... [are] necessary to win some votes but ... also will drive some votes away," according to CongressDaily/AM. With Republican leaders' deadline of Oct. 17 10 days away, CongressDaily/AM reports that conferees have yet to finalize the following issues:

• Competition provision: The House bill calls for direct competition between fee-for-service Medicare and private plans beginning in 2010. Many House Republicans say that "[s]ome sort of direct competition" is an "absolute requirement," but many Senate Democrats consider it a "deal-breaker," CongressDaily/AM reports.
  
  
• Means testing/income relating: The House bill calls for beneficiaries with higher annual incomes to pay more out-of-pocket for their drug costs before catastrophic coverage would take effect. For instance, beneficiaries with incomes above $100,000 would pay $5,820 out-of-pocket before the coverage would begin, compared with $3,500 for beneficiaries with annual incomes below $60,000. The provision has support in both the House and the Senate, according to CongressDaily/AM. Conferees also are reportedly considering charging beneficiaries with higher incomes larger premiums for Medicare Part B, which covers outpatient services. Many analysts have said it would be more logical to vary the premiums, rather than the benefit, CongressDaily/AM reports.
  
  
• Drug benefit administration: Many conservatives oppose a Senate provision that would call for the federal government to administer the drug benefit in areas where fewer than two private plans offer coverage, saying that a government plan could overpower private plans participating in those regions. A bipartisan group of senators representing rural areas has made this their "line in the sand," CongressDaily/AM reports.
  
  
• Health savings accounts: The House bill includes a $174 billion provision supported by conservatives that would expand use of medical savings accounts. Many Democrats oppose the accounts, saying that they could "undermine the insurance pool by attracting the healthy and wealthy," according to CongressDaily/AM.
  
  
• Drug reimportation: Although both the House and Senate bills include provisions that would allow people in the United States to reimport U.S.-made prescription drugs from Canada, both measures also include language that would give the FDA the authority to effectively nullify such a provision. The FDA opposes reimportation because of safety concerns and would likely veto any relaxation of rules. However, the House's official negotiating position, established in a bill (HR 2427) passed in July, includes language that would allow drug imports from Canada and other industrialized nations but would not give the FDA veto power. But with the exception of House Ways and Means Health Subcommittee Chair Nancy Johnson (R-Conn.), all the House Republican conferees voted against that bill (Rovner, CongressDaily/AM, 10/7).