G.O.P. Drug Plan for Elderly Nears Passage in House [NYT]
Some kind of drug benefit for Medicare will be passed before this year's election. Still very much in the squabbling stage. There will be some kind of increased price pressure on the pharmas also. The Republican plan in the House calls for $31 billion a year, the Democrats want more, along with more pressure on pharmas. - Doc
By ROBERT PEAR
WASHINGTON, June 21 -- After an all-night session, the House Committee on Energy and Commerce approved a Republican bill today to provide prescription drug benefits to the elderly under Medicare, clearing the way for House passage of the measure next week.
The party-line vote, 30 to 23, was a major legislative and political victory for House Republicans, who, like Democrats, have been bombarded with appeals from constituents complaining they cannot afford the drugs prescribed by their doctors. Both parties are eager to position themselves as protectors of the elderly in advance of the November elections.
Representative Billy Tauzin, the Louisiana Republican who as chairman shepherded the bill through the committee, said it would give the elderly a "permanent entitlement" to insurance for prescription drugs.
"This will put a lot of pressure on the Senate to pass a bill and meet us in a conference," Mr. Tauzin said in an interview.
Representative John D. Dingell of Michigan, the senior Democrat on the committee, said: "I seriously doubt that this bill will ever become law in its present form. A major purpose of this whole exercise was for Republicans to ensure that they'll have political protection when the election comes around this fall."
For their part, Republicans said Democrats were less interested in enacting legislation than in using the issue to their advantage in the Congressional elections.
The committee worked through the night and endorsed the legislation at 8:25 this morning, after three and a half days of work. The action came two days after the House Ways and Means Committee, which shares jurisdiction over Medicare, approved a similar bill.
Senator Tom Daschle, the majority leader, said the Senate would vote next month on drug legislation providing more generous benefits. Mr. Daschle, a South Dakota Democrat, said the House Republican bill was "a preposterous plan" because it would leave a large gap in coverage for people using more than $2,000 worth of prescription drugs a year.
At a cost of $310 billion over 10 years, the House Republican bill would be the biggest expansion of Medicare since creation of the program in 1965. But Democrats in both chambers said it was inadequate. Their proposals call for spending $400 billion to $800 billion or more.
So far, it appears, no prescription drug proposal in the Senate has the 60 votes needed to shut off debate there. The main Senate Democratic proposal, offered by Bob Graham of Florida, has 28 co-sponsors.
The action of the Energy and Commerce Committee is important for several reasons. The panel is sometimes described as a bellwether of Congressional opinion. Mr. Tauzin, a former Democrat, allowed Democrats to offer dozens of amendments so they could not complain that the bill was rammed through.
The Energy and Commerce panel made several small changes in the measure approved by the Ways and Means Committee. It set the limit on out-of-pocket spending by Medicare beneficiaries for prescription drugs at $3,700 a year, $100 lower than what Ways and Means members had approved. Also, the Energy and Commerce Committee discarded a proposal to charge a co-payment of $40 to $45 every two months for patients using home health care services. Home care has been exempt from co-payments since 1972.
In the House, the two parties have major philosophical differences over the structure of a drug benefits program. Under the Republican bill, the government would pay subsidies to insurance companies to induce them to offer insurance covering drug costs. Such "drug only" insurance does not exist, but Republicans say that private companies could devise and market it better than Medicare's lumbering bureaucracy.
Democrats said this was the first step in a Republican plan to privatize Medicare, the federal health program for 40 million elderly and disabled people.
The House Republican bill would also increase Medicare payments to doctors, hospitals, health maintenance organizations and other health care providers. These increases, avidly sought by lobbyists, have bipartisan support and are likely to become law this year, regardless of what happens to the rest of the bill.
Under the Democratic proposals, Medicare drug benefits and premiums would be uniform in all parts of the country. The House Republican bill defines standard coverage, but private insurers would have some freedom to alter premiums and other details within specified limits.
Both parties want private entities to manage drug benefits for Medicare patients, as they do in employer-sponsored health plans. House Republicans would go further. Under their bill, these private entities and the government would share the risk of financial loss if subscribers' drug costs exceeded expectations.
Democrats reject that idea. Drug coverage, they say, should not be subject to the vagaries of the private insurance market. Moreover, the Democrats say, elderly people and the disabled use more prescription drugs than other population groups and are unlikely to be a good insurance risk for private insurers.
Representative Sherrod Brown, Democrat of Ohio, expressed the view of many in his party when he said that Republicans were "in the pocket of drug companies."
Drug companies prefer the Republicans' market-oriented approach over Democratic alternatives, which would do more to rein in drug prices. But Mr. Tauzin insisted that drug companies strenuously opposed some provisions of his bill.
One such provision would help Medicare negotiate with drug companies to obtain prices lower than those charged to other large purchasers. Over 10 years, Mr. Tauzin said, this provision would save Medicare $19 billion, which would be used in the Republican bill to enhance drug benefits for the elderly.
Christopher P. Molineaux, a spokesman for the Pharmaceutical Research and Manufacturers of America, a lobby for drug companies, said, "This provision was a complete surprise to the industry, and we are very concerned about its potential impact on our companies."
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