House Ways and Means Committee Approves Medicare Reform Bill
The House Ways and Means Committee yesterday voted 25-15 to approve a $413 billion, 10-year bill (HR 2473) that would attempt to increase the participation of private plans in Medicare and offer all beneficiaries a drug benefit, the Wall Street Journal reports (Rogers, Wall Street Journal, 6/18). The House plan calls for beneficiaries beginning in 2006 to 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 (California Healthline, 6/17). The Journal reports that 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 (Wall Street Journal, 6/18).
The bill also would establish direct price competition between traditional Medicare and private health plans beginning in 2010 (California Healthline, 6/17). The committee voted 23-15 along party lines to defeat a Democrat-backed amendment that would have eliminated the competition provision altogether, the Washington Times reports. Ways and Means Committee Chair Bill Thomas (R-Calif.) "modified [the competition provision] slightly" by phasing it in over five years and creating some controls so that traditional Medicare premiums do not "skyrocket," the Washington Times reports (Fagan, Washington Times, 6/18). The committee also voted along party lines to defeat a Democrat-backed amendment that would have required the government to offer its own prescription drug plan in addition to those offered by private plans, the New York Times reports (Pear/Toner, New York Times, 6/18). The House bill includes a provision that would increase payments to existing Medicare+Choice health plans to 3% to 16% above fee-for-service payments in their area, the Journal reports. The increased payments would take effect before 2006, creating an "investment window" in which Republicans believe private plans could compete profitably but also use the increased subsidies to reduce premiums or increase benefits packages to make them more attractive to beneficiaries, according to the Journal. According to the Journal, should a private plan bid to provide services below the reimbursement rate, the bill calls for 75% of the difference to be rebated to reduce premiums or improve benefits (Wall Street Journal, 6/18).
Rep. Nancy Johnson (R-Conn.) said the House bill "is going to serve our seniors well." House Majority Leader Tom Delay (R-Texas) said that increased competition among private health plans ultimately would reduce the cost of care, adding that Democrats are "trying to scare seniors" by claiming otherwise, the Washington Times reports. But Rep. Pete Stark (D-Calif.) said, "What we have before us is a rotten deal for seniors. It privatizes Medicare" (Washington Times, 6/18). House Minority Leader Nancy Pelosi (D-Calif.) added that the bill "turns Medicare over to the HMOs [and] turns Medicare into a voucher program." However, much of Democrats' criticism was aimed at the competition provision, which they contend would cause premiums to rise for those who choose to stay in traditional Medicare, the Washington Post reports (Dewar/Eilperin, Washington Post, 6/18). The competition provision "will result in a march from Medicare of the healthy and wealthy," Rep. John Dingell (D-Mich.) said, adding, "It is a cold-hearted Republican attempt to destroy Medicare as we know it" (Heil/Rovner, CongressDaily, 6/17). Sen. Edward Kennedy (D-Mass.) said that the competition provision is "a poison pill that could kill the prospects for reform and destroy all the progress that has been made in the Senate." CMS Administrator Tom Scully said that President Bush did not suggest the competition provision. He added, "Philosophically, you could make a good argument for it. But -- and this is where we become concerned -- it could potentially impact premiums, and we are very concerned about protecting premiums to make sure they don't go up" (New York Times, 6/18).
A report by Consumers Union released yesterday criticized both the House and Senate Medicare reform bills, the Post reports. According to the report, "The combination of skimpy benefits and historically high growth of prescription drug expenditures mean that most consumers without prescription drug coverage in 2003 would be worse off in 2007 "because of higher out-of-pocket expenses" (Washington Post, 6/18). Urban Institute President Robert Reischauer said that many people will be "disappointed" by the House and Senate bills "because the benefit is so skimpy compared to that most Americans are familiar with" under employer-sponsored insurance (Meckler, AP/Houston Chronicle, 6/17).
The House Energy and Commerce Committee yesterday began to mark up the House Medicare reform bill and is expected to take three days approve it, the Washington Times reports (Washington Times, 6/18). Energy and Commerce Committee Chair Billy Tauzin (R-La.) has agreed to consider during the markup a provision by a group of Republicans -- Reps. Richard Burr (N.C.), Charlie Norwood (Ga.), Joe Barton (Texas), John Shadegg (Ariz.) and Steve Buyer (Ind.) -- who are pushing for a "defined contribution" approach to Medicare, CongressDaily reports (Hess, CongressDaily, 6/17). Their plan calls for beneficiaries to receive tax breaks for contributing to a debit card that they could use to purchase prescription drugs until 2006, when the drug benefit would take effect, the AP/Hartford Courant reports (Meckler, AP/Hartford Courant, 6/18). The Energy and Commerce Committee and the Ways and Means Committee versions of the bill will be merged later this week and then considered by the full House next week, the Baltimore Sun reports (Hirschfeld Davis, Baltimore Sun, 6/18). Both the House and Senate, which yesterday continued floor debate on its Medicare reform bill (S 1), expect to complete work on their Medicare bills before the July 4 recess and hope to send President Bush a bill before the August recess, the Journal reports (Wall Street Journal, 6/18).
- The Boston Globe today examines Democratic presidential candidates' opposition to the Medicare reform proposals in the House and Senate (Milligan, Boston Globe, 6/18).
- The Knight Ridder/Minneapolis Star Tribune today examines the issue of whether Medicare reform will address the issue of who -- either states or the federal government -- will pay for the prescription drug costs of people dually eligible for Medicare and Medicaid (Pugh, Knight Ridder/Minneapolis Star Tribune, 6/18).
- The Los Angeles Times explores opposition from some Republicans and Democrats to the current Medicare reform proposals (Hook, Los Angeles Times, 6/18).
- PBS' "NewsHour with Jim Lehrer" yesterday reported on the Senate Medicare reform debate. The segment includes comments from Robert Laszewski, a consultant who works with health insurers; AARP CEO Bill Novelli; and Sens. Gordon Smith (R-Ore.) and Debbie Stabenow (D-Mich.) (Ifill, "NewsHour with Jim Lehrer," PBS, 6/17). The full transcript of the segment is available online. The full segment is also available in RealPlayer online.
- Roll Call today examines the "figh[t]" between Thomas and Senate Finance Committee Chair Charles Grassley (R-Iowa) over who will chair the conference committee tasked with reconciling the differences between the House and Senate's separate Medicare bills (Pierce, Roll Call, 6/18).