Medicare Negotiators Consider Proposals To Maintain Employer-Sponsored Retiree Prescription Drug Coverage
Negotiators attempting to reconcile the House and Senate Medicare bills (HR 1 and S 1) are "leaning toward boosting incentives" to keep companies that offer retiree drug benefits from cutting those benefits if Congress passes a prescription drug benefit under Medicare, the Wall Street Journal reports (Lueck, Wall Street Journal, 10/15). The Congressional Budget Office has estimated that 32% of Medicare beneficiaries who currently have drug coverage through their former employer would lose that coverage under the House Medicare bill, and an estimated 37% would lose employer-sponsored drug benefits under the Senate bill (California Healthline, 10/14). According to the CBO, many employers might view a Medicare drug benefit as a way to reduce the costs and risks of providing drug coverage to retired employees (California Healthline, 10/10). Some lawmakers are calling for an increase in subsidies to employers for drug costs, beyond the amounts called for in the House and Senate bills (Wall Street Journal, 10/15). Sen. Charles Grassley (R-Iowa) said that conferees are "likely to agree" to allocate $75 billion to $80 billion over a decade to provide incentives to employers, with much of the funding going to large companies, the AP/Boston Globe reports (Espo, AP/Boston Globe, 10/14). But Sen. Don Nickles (R-Okla.) said, "I wouldn't say we're leaning toward anything." He added, "We're trying to figure out a way not to just have the government assume responsibility" (Rovner, CongressDaily/AM, 10/15). The Journal reports that the "jockeying over the retiree benefit issue reflects a fundamental shift" for many Republicans who previously had opposed the incentives "because there was no certainty any breaks would change employer behavior." Now, however, Republicans are responding to pressure from their constituents and pressing for tax breaks, while Democrats are attempting to protect subsidies promised under the Senate bill for low-income Medicare beneficiaries, the Journal reports. "This tends to be one of those things that everyone wants to do something about," Grassley said, adding that "only time will tell" how the incentives under discussion would impact employer-based retiree drug coverage.
Conferees also are planning to include in the final bill a House provision that would create tax-preferred health savings accounts for all individuals -- not just Medicare beneficiaries -- to fund out-of-pocket medical expenses, the Journal reports (Wall Street Journal, 10/15). Under the House bill, any individual whose annual health insurance deductibles are at least $1,000 or more than $2,000 for a family would be eligible to establish the accounts (California Healthline, 6/27). Some companies say that federal accounting rules "make it difficult to establish such accounts," the Journal reports. House Speaker Dennis Hastert (R-Ill.) called the accounts "the most important piece in the bill," but many Democrats have "blasted the proposal," saying it would increase the federal deficit and prompt more employers to scale back health benefits, according to the Journal (Wall Street Journal, 10/15). Conferees are scheduled to address the issue Thursday (Rovner, CongressDaily, 10/14).
On Monday, "key lawmakers" involved with reconciling the Medicare bills acknowledged that they likely will miss the Oct. 17 deadline set by Republican leaders, the AP/Globe reports. Conferees have scheduled daily sessions this week on "a variety of controversial items" (AP/Boston Globe, 10/14). During a Tuesday meeting, negotiators discussed several of the issues but did not make any decisions, CongressDaily/AM reports. Grassley said, "We've got a lot of stuff on paper, but we haven't had a vote that says, 'This is what we're doing to do'" (CongressDaily/AM, 10/15). Sen. Max Baucus (D-Mont.) said that meeting the deadline "is going to be virtually impossible" (CongressDaily, 10/14). However, he added that "there's a good chance [Congress will] pass a bill this year." President Bush on Monday met with senior Republican lawmakers at the White House and "urged them to press ahead with Medicare," the AP/Globe reports (AP/Boston Globe, 10/14). Conferees on Wednesday and Thursday plan to address the issue of whether to require wealthier Medicare beneficiaries to pay higher premiums for Medicare Part B, which covers outpatient care, as well as "various ways to keep the overall cost of the bill under $400 billion" (CongressDaily/AM, 10/15). On Friday, conferees will address a House-approved provision that calls for private health plans to compete with traditional Medicare beginning in 2010 (CongressDaily, 10/14).
In a full-page ad in Roll Call on Wednesday, the National Medical Association urged lawmakers to reach a compromise on the Medicare bill and pass a prescription drug benefit. The ad calls for Congress to "consider a plan that would ensure access to life-saving medicines" (Roll Call, 10/15).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.