White House Deal With Drugmakers Survives Challenge in Committee
In the third day of marking up its draft health reform bill on Thursday, the Senate Finance Committee "scored a big victory" for President Obama by defeating an amendment that would have reversed the June agreement between the pharmaceutical industry and the White House to provide $80 billion over 10 years to reduce drug costs for Medicare beneficiaries, the New York Times reports (Pear/Calmes, New York Times, 9/25).
The committee voted 13-10 to reject the proposal by Sen. Bill Nelson (D-Fla.) that would have raised $106 billion over 10 years from drugmakers to provide Medicare beneficiaries with the same drug discounts that Medicaid beneficiaries receive.
About $50 billion from those funds would have been used to close the Medicare prescription coverage gap.
Finance Committee Chair Max Baucus (D-Mont.) -- who voted against the amendment with two other Democrats and all 10 of the committee's Republicans -- said, "I want to close the doughnut hole as much as anybody, but I think the way it is being done here is inappropriate."
Baucus played a role in securing the agreement between the White House and the Pharmaceutical Research and Manufacturers of America (Edney, CongressDaily, 9/24).
The original agreement between the Obama administration, Baucus and PhRMA stipulated that the White House would not support any additional commitments from the drug industry, according to the Washington Times (Haberkorn, Washington Times, 9/24).
Committee Strikes Down Individual Mandate Amendment
The Finance Committee also voted 14-9 to reject an amendment that would have overturned a proposal in the draft requiring all U.S. residents to purchase health insurance coverage by 2013, CQ HealthBeat reports.
Under the proposal, residents would be required to pay a fee if they failed to obtain coverage (Reichard , CQ HealthBeat, 9/24).
Sen. Jim Bunning (R-Ky.), who proposed the amendment, said, "The individual mandate in this bill is un-American. It may even be unconstitutional" (Whitesides/Smith, Reuters, 9/24).
Sen. John Ensign (R-Nev.), also a critic of the proposal, said it raised the prospect that it could prompt some people to voluntarily drop their coverage.
Baucus called the amendment "mortally wounding," adding, "The system won't work if this amendment passes" (Reichard , CQ HealthBeat, 9/24).
Public Option To Take Spotlight on Tuesday
Sen. Charles Schumer (D-N.Y.), vice chair of the Senate Democratic Conference, said that he will introduce amendments on Tuesday to include a public plan in the Finance Committee's reform proposal, Roll Call reports (Drucker, Roll Call, 9/25).
Schumer and Senate Finance Subcommittee on Health Care Chair Jay Rockefeller (D-W.Va.) initially had planned to introduce the amendments on Friday, CongressDaily reports.
The current version of the Finance Committee's proposal does not contain a public plan, but replaces it with a proposal that would create a network of private not-for-profit health cooperatives. Baucus included the co-ops in the bill to spur competition with private insurers and partly to attract the votes of more moderate Democrats and Republicans (Edney, CongressDaily, 9/25).
On Thursday, Schumer expressed confidence that a public plan would be included in the final reform legislation that Obama signs into law. Schumer called his amendment an "underdog," but said, "I think we have a strong chance on the Senate floor to get it" (Pierce, Roll Call, 9/24).
Both the House reform bill (HR 3200) and the Senate Health, Education, Labor and Pensions Committee's version of the bill (S 1679) have a public plan (Armstrong, CQ Today, 9/24).
Other Amendments Considered, Rejected
The Finance Committee also voted along party lines to defeat an amendment that would have interrupted Baucus' plan to extend coverage to more uninsured people if a million or more currently insured U.S. residents are required to pay higher premiums as a result of the legislation, the Wall Street Journal reports.
Sen. Orrin Hatch (R-Utah), who proposed the amendment, said he wanted to protect seniors who have private insurance coverage under Medicare Advantage plans but would stand to lose some benefits under a proposal to cut payments to commercial insurers (Wall Street Journal, 9/24).
Senate Minority Leader Mitch McConnell (R-Ky.) and other Republican senators have argued that the proposal to cut payments to MA plans by more than $100 billion over 10 years would affect about 10 million seniors.
McConnell said Thursday, "This is a massive raid on a program millions of seniors depend on in order to cover the cost of another new government program" (Edney, CongressDaily, 9/24).
Bill Would Cut Deficit by $23 Billion
Baucus' revised draft of the Finance Committee's bill would cut the federal budget deficit by $23 billion in the first 10 years, according to a preliminary estimate of the bill by committee staff, CQ HealthBeat reports.
The Congressional Budget Office initially projected that the first version of the bill would cut into the federal deficit by $49 billion between 2010 and 2019.
The new estimate was based on oral and written estimates provided by CBO's Joint Committee on Taxation, according to CQ HealthBeat.
In addition, the current version of the bill would cost $900 billion over the 10-year period, up from an earlier estimate of $856 billion, as a result of Baucus' concessions to the measure (Reichard , CQ HealthBeat, 9/24).
Finance Committee Work Will Continue Into Next WeekThe Finance Committee is expected to continue its markup of the draft bill next week, delaying Baucus' earlier timeline for completing the process by Friday, Roll Call reports (Drucker/Pierce, Roll Call, 9/24). 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.