Medicare Conferees Agree To Allow Federal Government To Guarantee Prescription Drug Coverage
Negotiators attempting to reconcile the House and Senate Medicare bills (HR 1 and S 1) reached an agreement late Monday on a provision that would require the federal government to intervene and provide prescription drug coverage to Medicare beneficiaries in areas where fewer than two private plans decide to participate, CongressDaily/AM reports (Heil, CongressDaily/AM, 10/21). Under the compromise provision, the government would intervene to offer drug benefits if fewer than two private plans offered free-standing drug coverage policies in any one market, the New York Times reports (Pear, New York Times, 10/21). Conferees gave few other details about the compromise provision, according to CongressDaily/AM. Sen. Charles Grassley (R-Iowa), a member of the Medicare conference committee, said that negotiators will work on the provision again Tuesday (CongressDaily/AM, 10/21). The Senate bill includes a similar provision, which is a "key demand" of many Democrats, the AP/Las Vegas Sun reports (Espo, AP/Las Vegas Sun, 10/20). The House bill addresses the issue of private plan participation by including a provision that would offer more money to private plans in areas where they might not otherwise offer drug coverage (CongressDaily/AM, 10/21).
Grassley said, however, that the agreement is a "compromise between the House and Senate provisions and not a House 'cave-in' to the Senate," the Washington Times reports (Pierce, Washington Times, 10/21). Grassley said, "Here's something that's very important, particularly to Democrats. It is important to me and the Senate. The House did not have anything like it. The [Bush] administration really doesn't like it. But it's something that we are going to have for the Senate, and it seems to me that the House is willing to buy into it" (New York Times, 10/21). Some lawmakers who support the agreement have previously expressed concern that private plans would not offer stand-alone drug coverage in rural areas because of financial concerns, according to CongressDaily/AM. Those opposed to the such a provision, including the Bush administration and many conservative Republicans, said that it could give the federal government "too large a role in administering the new drug benefit," CongressDaily/AM reports (CongressDaily/AM, 10/21). The Bush administration also has expressed concerns that private health plans would be discouraged from entering the market if the government began to provide drug coverage to Medicare beneficiaries (New York Times, 10/21).
Conferees also reported progress on other issues on Monday. They discussed a provision included in the House bill but not in the Senate bill that would require private insurers to begin competing with traditional, fee-for-service Medicare beginning in 2010 (New York Times, 10/21). Many House conservatives have insisted that such a provision be included in the final bill (Washington Times, 10/21). Under the House bill, if costs under traditional Medicare are higher than costs under private plans, beneficiaries in traditional Medicare would have to pay higher premiums. According to some Republicans, such a provision would help slow the Medicare spending growth rate over time, but some Democrats counter that it could force beneficiaries to join private plans because they would not be able to afford premiums under traditional Medicare. Conferees said they have discussed proposals to gradually introduce the provision in selected markets and to limit annual premium increases. They also have agreed to a provision opposed by the Bush administration that would allow an unlimited number of private insurers to compete in any region. The administration favors allowing no more than three plans to participate in any given region (New York Times, 10/21). Grassley said that conferees have "made some headway" on the issue but added, "I wouldn't want to say we reached a conclusion on that." Several aides to lawmakers said they expect "formal decision-making" to "begin shortly," the AP/Sun reports (AP/Las Vegas Sun, 10/20). Sen. Max Baucus (D-Mont.) "hinted" that conferees will soon make other agreements, citing "high levels of comfort" among negotiators on the idea of a "blended benchmark" on the issue of combining private insurers' bids with government payment rates to set subsidies to private plans, CongressDaily/AM reports (CongressDaily/AM, 10/21).
During a "conceptual discussion" with lawmakers on Monday, HHS Secretary Tommy Thompson suggested to lawmakers that any changes they approve to Medicare's premium structure should apply only to "future generations of beneficiaries" and not to the 40 million people currently in the program or people who will become eligible in the next few years, the Wall Street Journal reports. Thompson reiterated a position favored by President Bush to ensure that any rule changes do not affect current beneficiaries and soon-to-be beneficiaries, according to White House spokesperson Trent Duffy. Thompson also suggested that the competition provision in the House bill could be changed to apply to people currently younger than ages 55 or 60 (Lueck, Wall Street Journal, 10/21).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.