Justice Department Asked To Investigate Complaints of Medicare Vote Bribe
Democratic National Committee Chair Terry McAuliffe and legal watchdog groups have requested that the Justice Department review complaints that some House Republicans offered Rep. Nick Smith (R-Mich.) money for his son's election campaign if he voted for the Medicare legislation (HR 1), USA Today reports. The House on Nov. 22 passed the bill in a 220-215 vote (Welch/Stone, USA Today, 12/5). The Senate passed the bill three days later in a 55-44 vote, and President Bush is expected to sign the legislation in a ceremony on Monday (California Healthline, 12/3). According to Nick Smith, House Republican leaders offered to give money to his son's campaign -- Brad Smith is running for the House seat that his father will vacate in 2004 -- in return for his support of the Medicare bill. Nick Smith also said that leaders "threatened to support other GOP candidates" in that campaign if he did not vote for the bill, according to the AP/Los Angeles Times. Other Republicans besides Brad Smith are running for Nick Smith's seat. Nick Smith voted against the Medicare legislation (AP/Los Angeles Times, 12/5). USA Today reports that Brad Smith said that his father was told "there's an opportunity for substantial support for your son" if Nick Smith supported the bill. Brad Smith added that his father did not regard the offer as a bribe (Welch/Stone, USA Today, 12/5). However, the AP/Times reports that in a Nov. 23 opinion column, Nick Smith wrote, "Bribes and special deals were offered to convince members to vote yes." The Campaign Legal Center and the Citizens for Responsibility and Ethics have filed complaints with the Justice Department concerning the alleged bribe. According to CLC spokesperson Mark Glaze, House leaders' action violates a federal law that allows verbal persuasion of lawmakers but prohibits people to offer public officials something of value in exchange for a vote (AP/Los Angeles Times, 12/5). McAuliffe said, "Not only was this bribe offered to a member of Congress, it was offered on the floor of the House of Representatives by another member of Congress" (USA Today, 12/5). House Speaker Dennis Hastert's (R-Ill.) office "denied threats were made," according to the AP/Times. The Justice Department will review the complaints, spokesperson Mark Corallo said on Thursday (AP/Los Angeles Times, 12/5). However, Charles Lewis, executive director of the Center for Public Integrity, said there is "little chance" that the Justice Department or the House Committee on Standards of Official Conduct would investigate the incident because only a House member's request can trigger a committee investigation, USA Today reports. House Democratic leaders have declined to comment on Smith's allegations, according to USA Today. Norman Ornstein, a political analyst at the American Enterprise Institute, also said he was "very skeptical" that the government would take action on the investigation (Welch/Stone, USA Today, 12/5).
Days before Bush is scheduled to sign the Medicare legislation into law, political groups already have begun to use the bill's passage as a weapon in the upcoming congressional elections, according to the Washington Times. In the House, Democrats who were already vulnerable before they voted against the Medicare bill will be even more so in the 2004 elections, according to Carl Forti, a spokesperson for the National Republican Congressional Committee. But Rep. Robert Matsui (D-Calif.) said that the Medicare bill "presents tremendous opportunities for Democratic candidates in 2004," as Democrats will "make sure seniors understand that the [bill's] limited benefits are a Trojan horse for giveaways to HMOs and drug companies that will keep their drug costs high and threaten Medicare." The Republican Main Street Partnership on Wednesday began airing a radio ad in Pennsylvania criticizing Rep. Patrick Toomey (R-Pa.), who is running against Sen. Arlen Specter (R-Pa.) for Specter's seat, for voting against the bill. The RMSP supports Specter, according to the Washington Times. Three Republicans running against Sen. Russell Feingold (D-Wis.) attacked the senator for voting against the bill, and Rep. George Nethercutt (R-Wash.) seeking to replace Sen. Patty Murray (D-Wash.) has criticized Murray's "no" vote (Fagan, Washington Times, 12/5).
At a briefing sponsored by the Center for American Progress on Thursday, policy analysts continued to criticize the Medicare legislation, CongressDaily reports. Three analysts predicted that there would be a backlash against the bill as details of the planned changes to Medicare emerge, according to CongressDaily. Robert Berenson, a former Clinton administration Medicare official now working with the Urban Institute, said, "Every page you look at, you find more things (to suggest) that the real goal [of the legislation] is to replace traditional Medicare." Judy Feder, another former Clinton administration official and now dean of the Georgetown University Public Policy Institute, said that private plans will "pull apart the risk pool" that helps spread costs under traditional Medicare because they will attract healthier, younger beneficiaries. Jeanne Lambrew, a senior fellow at the Center for American Progress and an associate professor at George Washington University, added that the drug benefit will further push beneficiaries into private plans (Rovner, CongressDaily, 12/4).
At a conference on Thursday sponsored by the American Enterprise Institute, representatives from Medco Health, the American Pharmacists Association and the AAHP-HIAA praised Congress' approval of a Medicare drug benefit, but they also warned that the legislation will "present many extremely difficult and complicated administrative problems," according to CongressDaily. Christopher Hansen of AARP added that the group's endorsement of the legislation has not caused a large exodus of members. Gail Wilensky, who headed the Medicare system under the first Bush administration, said the approved legislation is the "best bill that could have come out," but she added that it is "a little short on innovation" and besides adding a drug benefit, would make few real changes to the program. John Calfee, a scholar at AEI, said he fears a "very, very adverse situation" in which the federal government would implement price controls to lower drug costs, which in turn would cut funds to drug manufacturers and reduce innovation (Rich, CongressDaily, 12/4).
Illinois-based Walgreens on Thursday announced that it will "not do business with new insurance plans that require patients" to purchase their drugs by mail order, the Chicago Tribune reports. Currently less than 5% of Walgreens' business is done with insurers that require mail order for certain prescriptions, according to the Tribune. The company's move is a "preemptive strike" against the possible effects of the new Medicare legislation, the Tribune reports. Pharmacy benefit managers, which often encourage and even require patients to order some medications by mail, will play a key role in the administration of the drug benefit, particularly for seniors seeking treatment for chronic conditions like heartburn. According to the Tribune, pharmacy retailers like Walgreens are concerned that mail-order drug sales have grown 17% in the last five years while prescription orders at chain stores have fallen. Mail order plans could keep patients from going to stores like Walgreens and possibly purchasing other items, the Tribune reports. Walgreens also says that patients who are forced to get their maintenance drugs solely by mail have fewer medication choices and less time with pharmacists, who can educate them about possible drug interactions and other health issues. The Tribune reports that the pharmaceutical industry believes that Walgreens' move is "risky" and "could hurt its bottom line" if employers choose to work with benefit managers contracting with other pharmacies (Japsen, Chicago Tribune, 12/5).
USA Today on Friday examined the provision in the Medicare bill calling for the creation of tax-preferred health savings accounts for individuals (Fogarty, USA Today, 12/5). The bill would allow the creation of tax-preferred health savings accounts for individuals with health plan deductibles of $1,000 per year and couples with deductibles of $2,000 per year (California Healthline, 11/18). USA Today reports that it remains "unclear" how popular the accounts will be, but some analysts, including Greg Scandlen, a health care expert at the Galen Institute, predict that the accounts' cost-savings features and likely promotion by large employers "could make them huge." He added that the accounts will likely be preferred by families with few health care spending needs and by individuals who spend $4,000 or more per year on health care. Scandlen said that health insurers will be the first to offer the new accounts, but banks, brokerages and mutual fund companies may begin offering them as well (Fogarty, USA Today, 12/5).
The Wall Street Journal on Friday examined some Medicare beneficiaries' "wariness" of Medicare managed care and how it could affect the success of private plan participation called for under the Medicare legislation. According to the Journal, more than one million Medicare beneficiaries lost Medicare+Choice coverage in recent years after some health plans scaled back or ended their participation in the program because of what they called low payments from the federal government. The Medicare legislation calls for large payment increases for health plans beginning in 2004, which could improve the profitability of Medicare managed care plans, according to the Journal. Robert Hayes, president of the Medicare Rights Center, said, "I'd be a bit uncomfortable if I were the marketing director for one of these plans. Millions of people on Medicare have been burned already -- they're going to be a tough sell." According to John Rowe, chair and CEO of Aetna, beneficiaries were disappointed by managed care plans' backing out of the M+C market because "they liked the plans" (Fuhrmans, Wall Street Journal, 12/5). CNN's "Lou Dobbs Tonight" Wednesday interviewed Sens. Chuck Hagel (R-Neb.) and Edward Kennedy (D-Mass.) about their concerns about the Medicare legislation (Dobbs, "Lou Dobbs Tonight," CNN, 12/3). The full transcript of the program is available online.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.