Many Obstacles Remain for Passage of Final Medicare Bill
The Newark Star-Ledger on Sunday examined how reaching a final compromise between the House and Senate Medicare bills (HR 1 and S 1) "will be difficult and may yet prove impossible." According to the Star-Ledger, House and Senate negotiators are working to "settle a host of contentious issues" while facing "powerful pressures" from Medicare beneficiaries, drug and insurance companies, organized labor, hospitals, doctors, states and interest groups. John Rother, policy director for AARP, said, "We are at a critical stage. It is a fragile political situation." Ron Pollack, head of Families USA, said, "I think the leadership in Congress and the White House ultimately will realize it is politically too dangerous to fail."
According to the Star-Ledger, the following are some of the issues that negotiators must address to reach a compromise:
- The competition provision: A provision in the House bill would call for private health plans to compete directly with fee-for-service Medicare beginning in 2010. Proponents of the provision say it is the "only way to control costs" in a program that will soon cover 76 million baby boomers. The Senate bill does not include the provision, and many Democrats consider it a "killer" amendment because they support the traditional Medicare system, according to the Star-Ledger. "It will be tough to come up with a middle ground. This is a major philosophical difference," Kenneth Thorpe, a professor of health policy at Emory University, said.
- Senior satisfaction: A survey released last week by the Kaiser Family Foundation and Harvard School of Public Health found that 52% of seniors are "very worried" that they would still pay too much for prescription drugs if either the House or Senate bill passes. "Seniors want a more generous Medicare prescription drug benefit, but with the federal budget deficit increasing, the window of opportunity for a richer benefit may have been missed," foundation President and CEO Drew Altman said.
- The drug industry: Although the Star-Ledger reports that the drug benefit has been "tailored ... to [the industry's] liking," drug makers still are concerned about a House provision that would allow for reimportation of U.S.-made drugs from abroad, where those drugs often are cheaper. Drug makers say such a provision could negatively impact their prices and profits and could compromise the safety of the medications.
- Health plans: Lobbyists for health plans have been asking for increased reimbursements for existing Medicare HMO plans, "wide latitude" to manage costs under the drug benefit and subsidies to mitigate the risk of participating in the drug benefit. "There are a number of discussions going on about risk-sharing -- providing a safety net for companies in the event that the costs of providing the drug benefit exceed reimbursements," Karen Ignagni, CEO of the American Association of Health Plans, said.
- "Means testing": House Republicans favor basing the drug benefit on a beneficiary's income, but Democrats "adamantly oppose" such a provision. Sen. Edward Kennedy (D-Mass.) has said that such a provision would be a "deal-breaker" for Democrats, the Star-Ledger reports.
- Dual eligibles: States have been lobbying Congress to include coverage under Medicare drug costs of approximately six million people eligible for both Medicare and Medicaid.
- State prescription drug assistance programs: Several states that have prescription drug assistance programs for low-income Medicare beneficiaries have been lobbying Congress to include a provision in the final bill that would ensure members of their programs could retain such benefits if the Medicare drug benefit is "less generous."
- Rural providers: Negotiators must settle a dispute over a provision that would increase Medicare payments by $25 billion over 10 years to rural hospitals and doctors.
- Labor unions: Union lobbyists are asking for provisions that would encourage private employers to retain the drug coverage they currently provide to retirees.
- Fallback provisions: Lawmakers must settle a dispute over what to do if private health insurers do not offer coverage in a particular region of the nation. The Senate bill would require the federal government to provide drug benefits in those areas if at least two private plans do not choose to participate, but House Republicans oppose that provision (Cohen, Newark Star-Ledger, 9/7).
The New York Times on Saturday examined successful lobbying efforts of the chain drug store industry in the Medicare reform debate. Although the National Association of Chain Drug Stores typically opposes any Medicare drug benefit proposal, Craig Fuller, the association's president, encouraged members to support such a benefit this year in a speech at the association's annual convention this spring. According to Fuller, that support should depend on whether a bill includes four provisions: a "level playing field" for drug stores and pharmacy benefits managers; "transparency" in PBMs' business practices; "convenient access" to drugs for beneficiaries through a drug store; and insulation from the risk that insurance payments would not cover the complete cost of the drugs dispensed. According to the Times, because much of the Medicare reform legislation is "hopelessly complex," lobbyists like Fuller often focus on the "obscure corners" of the bills that often go unnoticed by lawmakers but can "make or break the groups they represent." Fuller said, "It's remarkable how little even people who work on this [in Congress] understand the pharmacy benefit process." Some of the language from the drug store lobbyists' proposed amendments "slipped into" the final bills "virtually unchanged," and one amendment was included in the Senate bill nearly word-for-word, the Times reports (Brinkley, New York Times, 9/6).
Congress's "unwillingness" to consider using the purchasing power of Medicare to negotiate lower drug costs "means that the elderly may be forced to keep making tough choices" when it comes to purchasing prescription drugs, Chellie Pingree, president of Common Cause and author of legislation in Maine that authorized the state to negotiate drug discounts on behalf of its citizens, writes in a letter to the editor in the New York Times. Responding to a Sept. 4 article in the Times that examined some successful models to lower drug prices that Congress did not employ in its Medicare bills, Pingree notes that the federal government's failure to take advantage of Medicare's buying power has led to "proposals that will complicate the Medicare program," while not increasing access to affordable prescription drugs. Pingree concludes, "What older Americans want most is affordable prescription drug prices. Congress' unwillingness to consider using its bargaining power to negotiate lower prices means that the elderly may be forced to keep making tough choices" (Pingree, New York Times, 9/8).
The following broadcast programs reported on efforts to reconcile the House and Senate Medicare bills:
- ABCNews' "This Week": Kennedy discussed the differences between the bills. Kennedy said he is "very hopeful" there will a successful reconciliation, but he added that "the only way [lawmakers] will is if the president becomes involved" (Stephanopoulos, "This Week," ABCNews, 9/7). The full segment is available online in RealPlayer.
- NPR's "All Things Considered": NPR's Julie Rovner discussed Republicans' differences on provisions in both bills that would allocate at least $25 billion to increase payments to rural Medicare providers and a provision that would allow reimportation of U.S.-made prescription drugs from Canada (Rovner, "All Things Considered," NPR, 9/7). The full segment is available online in RealPlayer.
- NPR's "Morning Edition": The segment reported on the House means testing provision and includes comments from Rep. Nancy Johnson (R-Conn.); Jeff Lemieux, a senior economist at the Progressive Policy Institute; and Tricia Neuman, a Kaiser Family Foundation vice president (Rovner, "Morning Edition," NPR, 9/8). The full segment is available online in RealPlayer.