2003-11-09 -- Congressional Conference Committee Determined on Medicare Restructuring


Kaiser Foundation Daily Health Policy Report,

House Speaker Hastert Urges Medicare Negotiators To Finish Work on
Legislation

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As talks to reconcile House and Senate Medicare bills (HR 1 and S 1)
appear "stalled" over "deep ideological disagreements," House Speaker
Dennis Hastert (R-Ill.) on Thursday tried to "revive negotiations,"
the New York Times reports. Hastert urged negotiators to work quickly
to produce a bill that would pass both chambers, saying, "My personal
opinion is if we don't get this thing done now, we don't get it done.
It will be almost impossible for us to get anything major done after
we adjourn in the fall." If Congress does not approve a reconciled
Medicare bill this year, Democratic senators could "exploi[t]" the
issue in the 2004 election cycle, Hastert said, according to the
Times.

In an effort to pass legislation, the Times reports that House
Republicans have abandoned a goal of bipartisan support in the Senate
and are now aiming to produce a bill that would attain a simple
51-vote majority in the Senate. However, one unnamed Republican aide
said that a party-line vote strategy would probably be unsuccessful
because some Senate Republicans are expected to vote against the bill.
House Republican Whip Roy Blunt (Mo.) said that the House would not
likely pass a bill supported by 60 senators -- the number needed to
break a filibuster -- but he added, "I don't believe the Senate would
filibuster this issue, as important as it is." Blunt said, "I think
our goal should be to get a bill that gets a majority in the Senate."

Criticism Continues

On Thursday, Senate Democrats kept up a "drumbeat of criticism" on the
Medicare legislation, particularly criticizing a measure that would
require private health insurers to compete with traditional,
fee-for-service Medicare by 2010 and one that would relate
beneficiaries' incomes to premiums under Medicare Part B, which covers
outpatient services, the Times reports. Sen. Jack Reed (D-R.I.) called
the emerging legislation "the greatest bait-and-switch scheme the
Republic has ever seen." However, House Majority Leader Rep. Tom DeLay
(R-Texas) said lawmakers are "on the right course" because Democrats
are "starting to wail," according to the Times. DeLay said Democratic
lawmakers are "destructive and obstructive," while "the Republicans
are getting things done" (Pear, New York Times, 11/7).

Health Savings Accounts Disagreement

Hastert and Sen. Charles Grassley (R-Iowa) on Thursday disagreed on
including a provision regarding Health Savings Accounts in a final
Medicare bill, CongressDaily reports (Wegner/Heil, CongressDaily,
11/6). A measure in the House bill would permit people enrolled in
private health plans to create savings accounts to accrue money
tax-free to pay for some medical expenses, including medical
treatment, medications and long-term care services or coverage. Under
the provision, individuals with health insurance deductibles of at
least $1,000 and families with deductibles of at least $2,000 could
use the health savings accounts.

Conferees previously rejected creating Health Savings Security
Accounts for individuals with $500 deductibles and families with
$1,000 deductibles, the more expensive of the two accounts. The issue
has become important in winning conservative support for the Medicare
legislation, but some Democrats oppose the proposed health savings
accounts (Kaiser Daily Health Policy Report, 11/5).

Hastert said the accounts represent "one of the most important pieces"
of the drug bill. However, Grassley said that of the significant
debate points -- which include cost containment measures, income
relating and health savings accounts -- lawmakers are least likely to
reach a compromise on the health savings accounts.

In other matters, Grassley said that conferees are likely to include
language from the Senate Medicare bill that would allow U.S. residents
to purchase lower-cost prescription drugs from Canada (CongressDaily,
11/5). The Senate-passed legislation would allow the purchase of drugs
only from Canada and only if the FDA certifies the practice. A similar
provision included in the House bill would give U.S. residents
permission to purchase drugs from Canada and two dozen other
industrialized nations but would not require approval (Kaiser Daily
Health Policy Report, 11/6). Grassley said negotiators "can't go back
to the House and Senate" without a reimportation measure in a final
bill (CongressDaily, 11/6).

Talks on whether to discourage doctors from investing in specialty
hospitals, whether to require competitive bidding for durable medical
equipment and whether the government will administer Medicare drug
coverage in areas where too few private plans participate are expected
to continue on Friday, CongressDaily/AM reports. Negotiators likely
will take up "major decisions," such as reimportation, cost
containment measures and the competition provision, on Monday,
according to CongressDaily/AM.

Negotiations Threaten Nov. 21 Adjournment

CongressDaily/AM reports that the "slow pace" of the Medicare talks
might jeopardize the scheduled Nov. 21 congressional adjournment.
Conference committee members said it is not likely they will have a
final proposal ready by Monday, as requested by Rep. Bill Thomas
(R-Calif.), the conference committee's chair. Although it might not
take a full eight days to write a bill and get it scored by the
Congressional Budget Office, CongressDaily/AM reports that lawmakers
who are not conference committee members will need additional time to
review the legislation (Rovner/Heil, CongressDaily/AM, 11/7). House
Republicans have asked leadership to allow them three days to examine
a final bill before a floor vote (Kaiser Daily Health Policy Report,
10/29). In addition, several unnamed sources have said that the
emerging bill likely would exceed the $400 billion over 10 years
spending limit set by the Bush administration, which would "require
another round of negotiations and changes," according to
CongressDaily/AM(CongressDaily/AM, 11/7).

Report Criticizes Cost-Containment Proposals

Medicare cost-containment measures that lawmakers are considering "are
ill-designed and could force radical changes that would
disproportionately hurt those with low and moderate incomes,"
according to a report released by the Center on Budget and Policy
Priorities, CongressDaily/AM reports.

Conferees are considering proposals to cap the federal government's
general revenue Medicare spending at 45% of the total budget. A
measure that would reduce provider reimbursements would cause
providers to stop treating Medicare beneficiaries and other proposals
that would increase beneficiaries' share of costs could leave the
"near-poor unable to afford ... basic medical care," the report
states. The report also states, "It makes no ... sense to say that
reliance on general revenue financing makes Medicare Part B or the new
drug benefit insolvent" (Rovner, CongressDaily/AM, 11/7). The report
is available online.

http://www.cbpp.org/11-5-03health.htm



Final Bill Could 'Alienate' Beneficiaries

Negotiating a Medicare prescription drug benefit has been difficult
this year, as the "risk of alienating a key voting bloc with a bill
that falls well short of expectations is large," the Christian Science
Monitor reports. Medicare beneficiaries' concerns include the
"complexity" of the proposed drug benefit, increased health costs and
the possibility that former employers would stop offering retiree drug
benefits if a Medicare drug benefit is enacted, according to the
Monitor. David Certner, director of federal affairs for the AARP, said
that whether the benefit is "good or bad, it's going to be a lot more
choices and decisions than people had to make before. They are going
to be a lot more confused." Larry Sabato, a political scientist at the
University of Virginia, said, "Not only is a backlash possible, it's
likely. Seniors want what America probably can't afford. They are only
going to be satisfied with a very generous prescription drug bill that
would break the bank" (Russell Chaddock, Christian Science Monitor,
11/7). Sen. John Breaux (D-La.) said that unless Medicare negotiators
reach a compromise, the end result will be "a basket full of excuses
to give to seniors ... And they can't take excuses to the drug store
to get their prescriptions" (Kemper, Los Angeles Times, 11/7).