Some Lawmakers Call for Delay of Medicare Prescription Drug Benefit To Help Offset Hurricane Costs

Some fiscal conservatives in Congress are calling for a one-year delay in the implementation of the Medicare prescription drug benefit to offset the recovery and rebuilding costs from Hurricane Katrina, but Bush administration officials have rejected the proposal, the Washington Times reports (Lambro/Fagan, Washington Times, 9/20). Members of the House Republican Study Committee on Wednesday will launch their Operation Offset plan to fund recovery efforts on the Gulf Coast, and the proposed delay in implementation of the drug benefit will be among the main proposals that will be released, according to Rep. Mike Pence (R-Ind.), chair of the RSC (CongressDaily, 9/19).

The delay would save an estimated $40 billion of the approximately $200 billion in hurricane-related costs, according to Brian Riedl, a budget analyst at the Heritage Foundation (Havemann/Hook, Los Angeles Times, 9/20). The Heritage Foundation estimates emergency spending levels could increase the federal budget deficit to more than $500 billion in 2008 and $873 billion in 2015.

"Congress must ensure that a catastrophe of nature does not become a catastrophe of debt for our children and grandchildren," Pence said (Russell Chaddock, Christian Science Monitor, 9/20). He added that delaying the Medicare prescription drug benefit, which is scheduled to begin Jan. 1, 2006, "is a very serious option" that has support from a "broad number of members" of Congress (Washington Times, 9/20).

Other areas being considered for spending cuts include projects recently passed in the highway and energy bills and President Bush's proposal to make tax cuts permanent (Christian Science Monitor, 9/20).

According to the Washington Times, White House spokesperson Trent Duffy "dismissed the delay idea." He said, "We've made a commitment to seniors. Their lives depend on it. ... Now is not the time to snatch medicines out of medicine cabinets" (Washington Times, 9/20).

White House press secretary Scott McClellan added, "That is an important benefit for our seniors that will save them significant money on their prescription drugs."

A House Republican leadership aide said leading lawmakers likely will not support a delay after their efforts to approve the 2003 Medicare law and to promote the new drug benefit (Los Angeles Times, 9/20). However, according to CongressDaily, Bush has called for restraint on spending, and McClellan on Wednesday "did not rule out Bush vetoes" of fiscal year 2006 fiscal appropriations bills that do not include spending cuts to offset hurricane recovery costs.

McClellan also said the proposed savings included in Bush's FY 2006 budget are a "good starting point" to offset recovery spending (CongressDaily, 9/19). Bush has proposed saving at least $20 billion in nondefense discretionary spending and some $137 billion over 10 years in mandatory program spending (Bresnahan, Roll Call, 9/20).

Senate Majority Leader Bill Frist (R-Tenn.) also said Congress will examine spending, noting, "It is our job in the U.S. Senate to work together in a nonpartisan way to give the appropriate oversight to make sure that money is spent wisely, invested wisely, and that's exactly what we will do" (CongressDaily, 9/19).

One Republican leadership aide said the push for delay is "probably a message to the White House" about spending levels more than a policy goal, the Washington Times reports (Washington Times, 9/20).

Pence "vowed to press ahead" with efforts to offset hurricane recovery spending and to "push for a vote on delaying implementation of the Medicare drug program, despite White House opposition," Roll Call reports. "With all due respect to the White House and their intentions, House conservatives will vigorously pursue the one-year delay in the Medicare prescription drug entitlement," Pence said (Roll Call, 9/20).

In related news, CMS on Monday said that some regions of the nation could have as many as 40 or 50 different health plans providing drug coverage, CQ HealthBeat reports. CMS later this week is scheduled to release the names of the health plans that have been given contracts with CMS to administer the Medicare prescription drug benefit.

Speaking at a Generic Pharmaceutical Association policy forum on Monday, Babette Edgar, director of the Division of Finance and Operations at CMS' Medicare Drug Benefit Group, said some regions might have just a few plans while others will have many more. She noted that CMS is "a little bit" concerned that the large number of options in some areas of the U.S. could overwhelm or confuse beneficiaries but added that CMS is working to ensure that pharmacists help educate beneficiaries about their options and not try to steer consumers to some prescription drug plans and not others (CQ HealthBeat [1], 9/19).

CMS' announcement on Sept. 16 that Medicare Part B premiums will increase 13.2% in 2006 has presented a challenge for the American Medical Association and others seeking to reverse a scheduled 4.3% reduction in Medicare physician payments next year, CQ HealthBeat reports (CQ HealthBeat [2], 9/19). With Medicare law requiring that 25% of total spending on Part B be covered by premiums, any increase in the cost of part B -- including a reversal of the scheduled physician payment cut -- will result in higher premiums for beneficiaries, The Hill reports (Young, The Hill, 9/20).

AMA Trustee James Rohack said that physician services accounted for less than one-fifth of the increase in premiums in 2006, countering assertions that spending growth in Medicare physician payments is the key factor behind the 2006 premium increase. AMA also emphasized that if the payment cuts go through, beneficiaries' access to care would decrease as more doctors would decline to treat Medicare beneficiaries.

However, AMA's efforts could be slowed by AARP, which is lobbying to keep beneficiaries' premiums down, CQ HealthBeat reports (CQ HealthBeat [2], 9/19). AARP Senior Legislative Representative Andrea Price said the group is "not advocating against a physician-payment fix" but is more concerned about holding down premiums (The Hill, 9/20).

NPR's "All Things Considered" on Monday reported on how Hurricane Katrina might delay the implementation of the new Medicare prescription drug benefit. The segment includes comments from Ruth Kennedy, Louisiana's deputy Medicaid director; Cindy Mann, a professor at Georgetown University's Health Policy Institute; and CMS Administrator Mark McClellan (Rovner, "All Things Considered," NPR, 9/19). The complete segment is available online in RealPlayer.

In addition, CBS' "Evening News" on Monday included an interview with Sen. John McCain (R-Ariz.), who said that with the size of the budget deficit in the wake of Hurricane Katrina, the Medicare prescription drug benefit should be canceled (Borger, "Evening News," CBS, 9/19). The complete segment is available online in RealPlayer.

Additional information on the Medicare drug benefit is available online.