Medicare Drug Discount Cards ‘Major Source of Disagreement’ Between White House, Conferees
A proposal that would give Medicare beneficiaries prescription drug discount cards before a drug benefit would take effect has become a "major source of disagreement" between members of the House-Senate Medicare reform conference committee and the Bush administration, the New York Times reports. Lawmakers said that they hoped an agreement on the discount cards would "generate momentum" in the conference committee, the Times reports (Pear, New York Times, 8/4). Both the House and Senate Medicare bills (HR 1 and S 1) call for a drug discount card that could reduce Medicare beneficiaries' prescription drug costs by 15% or more. Lower-income beneficiaries would also receive subsidized drug coverage through the cards. Under the Senate bill, beneficiaries with incomes of up to 135% of the federal poverty level, or $12,123 per year for an individual, would be eligible for a $600 annual drug subsidy. Under the House bill, beneficiaries would be eligible for subsidies on a sliding scale; those whose incomes are below 135% of the federal poverty level would receive an $800 annual drug subsidy, and those whose incomes are above 150% of the federal poverty level, or $13,470 per year for an individual, would receive a $100 annual subsidy (California Healthline, 7/31). The cards would be provided and administered by pharmacy benefit managers, insurers, pharmacy chains and other companies. President Bush last week reiterated a drug discount card proposal he first announced in July 2001. That plan was blocked in September 2001 by a federal judge, who ruled that the administration had no authority to implement such a proposal. The House and Senate Medicare bills would grant the administration that authority, according to the Times.
However, the administration disagrees with some "major features" of the drug discount card proposals included in the House and Senate reform bills, according to documents sent to Congress by HHS officials, the Times reports. The Bush administration opposes the following provisions:
- A provision in the Senate bill that would guarantee a 20% minimum discount for low-income beneficiaries. Administration officials said that Congress should not mandate the amount of the discount.
- A provision in the Senate bill that states drug prices for beneficiaries could not be increased more than once every 60 days. According to the administration, "price stability is not a requirement of the drug benefit," the Times reports.
- A provision in the House bill that would require the companies that provide and administer the cards to provide counseling and other assistance to beneficiaries who are taking multiple drugs for chronic diseases. The administration said that such a provision would be "expensive and [would] severely inhibit private sector participation," according to the Times.
- A provision in the Senate plan that would require companies that provide and administer the cards to pass on all discounts and rebates to beneficiaries. Administration officials said that such a provision "could hurt the business case for card sponsors to participate in the program," the Times reports. Instead, the administration favors the House bill, which would allow card sponsors to "use some of these dollars for administrative costs and profits," according to the Times.
- Provisions in both bills that would require the card sponsors to consult an independent committee of physicians, pharmacists and other experts before deciding which drugs would qualify for discounts. According to the administration, such a provision is not necessary because the drug discount card program is likely to be temporary and "requirements should be kept to a minimum."
- A provision in the House bill that states the discount card program would begin 90 days after a Medicare reform bill is signed into law. Administration officials said that such a timeline is not possible and suggested a discount card take effect six months after a bill is enacted (New York Times, 8/4).
In a letter to House Ways and Means Committee Chair Bill Thomas (R-Calif.), a bipartisan group of governors asked Congress to "take responsibility" for the cost of providing prescription drugs to people who are eligible for both Medicaid and Medicare, the Sacramento Bee reports. The governors said that they have made it their "highest priority" to convince the federal government to pick up the cost of providing prescription drugs to dually eligible beneficiaries. According to the Bee, the governors said they "strongly support" a provision in the House Medicare bill that would "giv[e] elderly and disabled Medicare beneficiaries full access to the new Medicare prescription drug benefit." The Senate bill would have Medicaid continue to cover drug costs for dual-eligibles. About 6.2 million people are enrolled in both Medicaid and Medicare, and another four million people are considered dually eligible but have not yet signed up for both programs. According to the Bee, dual-eligibles make up 19% of all Medicaid beneficiaries, and states spend $7 billion per year to provide prescription drug coverage to such people (O'Rourke, Sacramento Bee, 8/2).
The Washington Post yesterday examined the growing "[d]isenchantment" among voters over House and Senate prescription drug benefit proposals. According to a Gallup/CNN/USA Today poll taken last month after the House and Senate reform bills passed, 76% of respondents favor a Medicare drug benefit. However, only 20% of respondents said they believe the House or Senate proposal would help them personally, the survey indicates. While a few weeks ago, a Medicare drug benefit "looked like a big winning issue for next year's campaigns," some lawmakers and political strategists now say that lawmakers could face "punishment" if they do pass a drug benefit, the Post reports. "People are getting frustrated ... they want to get something done. But once it is done, they're likely to think it's not adequate and push to get more," Robert Blendon, professor of health policy and political analysis at the Harvard University School of Public Health, said. For Democrats and Republicans, the "risk of doing the wrong thing may outweigh the risk of doing nothing at all," Democratic pollster Geoffrey Garin added. Thomas Mann, a government scholar at the Brookings Institution, said, "We're moving from a win-win situation to a lose-lose situation." But Rep. Thomas Reynolds (R-N.Y.) said, "I think we only lose if we don't pass anything" (Dewar, Washington Post, 8/3).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.