House set to vote on Medicare drug benefit

The debate over legislation amending the Medicare prescription-drug benefit moves to the legislative arena from the campaign trail this week with a vote in the House tomorrow and a Senate hearing today.

So far, congressional Democrats are moving ahead without asking the Bush administration to weigh in, but that hasn’t stopped the Centers for Medicare and Medicaid Services (CMS) from taking a lead role in pleading the Republican case against Democrats’ claims that federal negotiation of drug prices will save money for taxpayers and senior citizens over the deals the private Part D plans are striking with pharmaceutical companies.

The House Democratic leadership may not be allowing its Republican counterpart to offer alternative bills, and Senate Finance Committee Chairman Max Baucus (D-Mont.) may not have invited any administration officials to this morning’s hearings, but the GOP message against the Democratic bill is taking shape in advance of the real battle in the Senate set for later this year.

Current law expressly forbids the government from “interfering” with negotiations between the private plans and the drug companies. The House Democratic bill proposes to strike that language and instead require CMS’s parent agency, the Department of Health and Human Services (HHS), to negotiate with drug makers but also prohibit HHS from excluding any drugs from Part D.

The administration’s mounting campaign against the Democratic proposal also is accompanied by a more aggressive defense of Medicare Part D by congressional Republicans, most of whom previously had appeared reluctant to claim credit for the creation of the entitlement program expansion despite high approval ratings from beneficiaries.

CMS claims that the private Part D plans are negotiating discounts with drug makers that are good enough to make federal involvement unnecessary.

CMS and Part D’s defenders in Congress note that the Congressional Budget Office (CBO) determined in 2004 that federal price negotiations would be ineffective.

In a letter sent to then-Senate Majority Leader Bill Frist (R-Tenn.) in January 2004, then-CBO Director Douglas Holtz-Eakin wrote, “We estimate that striking that provision would have a negligible effect on federal spending because CBO estimates that substantial savings will be obtained by the private plans and that the Secretary would not be able to negotiate prices that further reduce federal spending to a significant degree.”

House Minority Leader John Boehner’s (R-Ohio) office re-circulated that letter to reporters this week.

But congressional Democrats and their allies contend that CBO’s evaluation is wrong, citing the deeper discounts obtained by the Department of Veterans Affairs (VA) for former military-service members.

The liberal advocacy group Families USA this week released a study comparing the VA’s prices for the 20 drugs most commonly used by senior citizens with those paid by the five largest providers of Part D benefits. According to the Families USA report, “Among those top 20 drugs, the median difference between the lowest Part D plan price and the lowest VA price is 58 percent.”

Although the administration consistently has touted Medicare Part D as a success, most congressional Republicans have been slow to embrace the program.

Democrats made Part D, and federal negotiation of drug prices, a central point of their campaigns during the midterm elections and one of their top priorities at the start of the 110th Congress. Nevertheless, few Republican candidates chose to tout the program on the campaign trail.

But with the House bill speeding its way to the floor and the Senate debate looming in the coming months, congressional Republicans are adopting a more aggressive stance.

This morning, members of the House Republican leadership will be joined by conservative rank-and-file lawmakers at a press conference to rail against the Democratic bill, which is set for a vote on Friday. Deputy Minority Whip Eric Cantor (R-Va.) and Republican Conference Chairman Adam Putnam (Fla.) headline the event, which also will feature GOP Reps. Paul Ryan (Wis.), Pete Sessions (Texas), Patrick McHenry (N.C.), Tom Price (Ga.) Michael Burgess (Texas) and Phil Gingrey (Ga.).

In the Senate, Finance Committee ranking member Chuck Grassley (R-Iowa), one of few authors of the bill that created Part D still in office, has taken on the role of lead attack dog against the Democratic proposals and already has made several floor speeches.

One of Grassley’s speeches highlighted the fact that Democratic proposals from the 1990s to create a Medicare drug benefit also included language excluding the government from price negotiations, a talking point also used by House Energy and Commerce Committee ranking member Joe Barton (R-Texas) and other Republicans. Democrats maintain they long ago rejected that position and that these past bills are not relevant to the current debate.