Medicare Bill Faces Tough Committee Battle

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WASHINGTON (UPI) — Analysts are skeptical, lawmakers are drawing battles lines, congressional staff is cautious: the Medicare prescription drug bill is in for a long, hot August full of negotiations.

A conference committee of lawmakers from the House and Senate is trying to meld disparate Medicare bills that passed each chamber in June. It is a daunting task — the Senate bill is 747 pages and the House bill is 1,043 pages.


Any final bill also must go back to the House and Senate for approval and be signed into law by President Bush, who probably represents the least contentious aspect as he has indicated he will sign just about anything to gain a Medicare win for the Republicans with elections looming in 2004.

“We will produce a conference report,” said Liz Scanlon, health policy adviser for Senate Majority Leader Bill Frist, R-Tenn. “It isn’t going to be easy.”

That might be the summer’s biggest understatement as the Medicare prescription drug momentum, which seemed to snowball in June, all but melted in July.

“I have to say that my assumption all along from the beginning of this Congress was that we would get a prescription drug bill enacted into law,” said Norman Ornstein, an analyst with the American Enterprise Institute in Washington. “I have now seen a very strange process emerge, and come to the conclusion that the odds are probably greater that we will get no bill this year, that we will get no law enacted this year.”

Both bills create a limited prescription drug benefit in Medicare. Each also contains a coverage gap in which the beneficiary would pay all medical costs until a certain dollar amount is reached, when the government then would begin to pick up most or all of the cost. The are differences in eligibility requirements for seniors in poverty, for whom the drug benefit would pay some, if not all, of their out-of-pocket costs. These differences, although significant, really are money allocation issues within the $400-billion plan and possibly among the easier to resolve in conference committee.

The fundamental political issues already are proving testy. Democrats want to keep Medicare a government-run and funded program available equally to all seniors. Republicans, concerned Medicare could go from being 12 percent of the U.S. budget now to 30 percent when the baby boomers retire, want to see if private health plans could provide care more efficiently for less money.

The biggest hurdle seems to be the House provision that would tie traditional Medicare payments in 2010 to what private plans in the program were bidding. If the cost of traditional Medicare were less than prevailing plans, then the difference would be passed along to beneficiaries — 75 percent — and to the government — 25 percent.

Pat Morrissey, deputy staff director for the House Commerce and Energy Committee who is proffering the Republican side, said this is a “good, responsible provision” because if traditional Medicare is cheaper than the plans cost, the beneficiaries would reap the rewards, and if the traditional program costs more, the 75 percent of the increase beneficiaries pay would be phased in over five years.

While Republicans consider this modest Medicare reform, it could be a political deal-breaker for Democrats. Rep. John Dingell, D-Mich., said he voted against the House bill — which squeaked through with a one-vote victory — because “the purpose of the bill is to end Medicare as we know it.”

Dingell said he supports the Senate bill. His colleagues in that chamber, including Senate Minority Leader Tom Daschle, D-S.D., have warned anything coming back that does not look substantially like the Senate bill will face a very tough battle and probable defeat.

Democrats contend the House bill would force seniors to enroll in private health plans that would limit their access to physicians and services. They fear those staying in traditional Medicare would be the very sick, as the private plans would cater to more healthy beneficiaries, so the costs in traditional Medicare would skyrocket and, because those extra costs would be passed through to beneficiaries, make even the traditional program too expensive for many seniors.

Morrissey said it was “critical that we produce a bill this year,” but added there would be a “complex set of negotiations,” with the worst possible scenario being to create an “implementation nightmare” if the final bill is not crafted properly.

Another high priority for Democrats is a fallback drug plan, contained in the Senate bill but not in the House measure. It would have the government provide a drug plan should private health plans not bid for Medicare business in one or more of the 10 service regions to be set up across the United States.

One issue could be resolved to help smooth process. Scanlon said the Congressional Budget Office is being asked to clarify how many retirees who now receive health care coverage from their former employers might lose it if a Medicare drug bill passes. Scanlon also said she was hearing “something quite different” than what the CBO was saying, noting employers actually might be more likely to retain their retiree benefits.

Means testing in the House bill, which would require seniors with higher incomes to pay more for their drug coverage, remains a bone of contention, as does dealing with beneficiaries who are eligible for both Medicare and Medicaid, the health care program run in conjunction with the states to help the indigent. The Senate bill would require states now paying the costs for the 6 million so-called dual eligibles under Medicaid to continue to do so, while the House bill would have Medicare pick up the tab.

The House bill also contains a $174-billion provision for health savings accounts and flexible spending for seniors who want to invest their own money to pay for their health care needs.

Kate Leone, a legislative assistant for Daschle, said Democrats think if there is $174 billion available it should be put toward the prescription drug benefit. Morrissey said the money is separate from the $400 billion drug package.

Leone said Democrats are committed to producing a bill better than either the House or Senate version, but “not at the expense of the program itself or beneficiaries.”

Ornstein said he thinks this Medicare legislation does not follow the usual Bush White House models, which try to gather substantial Republican support and then persuade just enough Democrats needed for passage to go along. Examples: the tax cut; the education bill, in which he wooed both parties and struck coalition deals in both the House and Senate; or the campaign finance bill, in which Bush stayed out of it entirely and then signed what came forward.

The president has said he will sign a drug bill, but he has not been hands-off with Medicare. The Republicans cut a deal in the Senate to pass the bill, but in the House, where Bush kept close tabs on his conservative sector, there still was divisiveness and a one-vote GOP win.

“Now can this hybrid work?” Ornstein pondered. “Well, we now are in a conference committee … where the suggestion is ‘no.'”

He said Senate Democrats and House Republicans have drawn battle lines over privatization. He predicts three possible outcomes: –Gridlock and no conference committee report.

*A compromise that includes the guts of the Senate bill and has House leaders in effect telling the “70 most conservative members of the House, ‘Sorry, you’re screwed and we’re going to go out and get our 218 votes by going to mainstream Democrats,'” he said.

*House Republicans and the White House force Sen. Chuck Grassley, R-Iowa, to come up with a 5-4 partisan vote among Senate conferees for the House bill and then bring it up in the Senate and dare the members there to filibuster or vote it down.

“To get Grassley to move on this is going to be difficult without bribing him with lots of rural healthcare money,” Ornstein said. “That may be however, the most likely outcome in the end.”

Gail Wilensky, an analyst at Project Hope in Washington, who has advised both Bush presidents on Medicare issues, said the private sector competition provisions in the House bill are very important to the future of the program.

“It is my hope that the conservatives in the House mean what they say, that these were deal breakers from their point of view in terms of supporting legislation,” she said. “While it’s hard for me to imagine the House leadership reaching out to very many Democrats to try to… make up their numbers were they to become disaffected, it may be more possible to imagine the White House or others reaching out in order to try to salvage the bill.”

The conference committee is not rushing negotiations — the staff will meet regularly through August and a report in September or even October likely is the earliest date possible.

Copyright 2003 by United Press International. All rights reserved.