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Prescription Drug Coverage Approved by House Committees

This week, two House committees approved a bill (H.R. 4954) aimed at providing prescription drug coverage to seniors. In the early hours of the morning on June 19, after a 13-hour mark-up, the House Ways and Means Committee approved, 22-16. The legislation is sponsored by Health Subcommittee Chair Nancy Johnson (R-CT).

The House Energy and Commerce Committee debated the bill for three days, with the final approval, 30-24, spilling over to a fourth day on June 21. Both committees worked from the same base bill but adopted different amendments. Next week, the House Rules Committee will merge the two bills for floor consideration.

Overall, H.R. 4954 would provide an estimated $350 billion Medicare prescription drug benefit over ten years. The bill would establish a voluntary Medicare prescription drug benefit; however, the coverage would be provided by private insurers, with federal subsidies to encourage plans to participate. Medicare beneficiaries would pay an estimated $250 deductible and an estimated $35 monthly premium. Once beneficiaries met the deductible, they would be required to pay 20 percent of their prescription costs up to $1,000. Between $1,001 and $2,000, the costs would be split 50-50, and between $2,001 and $3,800, seniors would be responsible for all of their prescription drug costs. The Ways and Means Committee-approved bill would set a catastrophic limit of $3,800, at which time the program would cover all drug costs, while the Energy and Commerce Committee-approved bill set the limit at $3,700.

H.R. 4954 also would make changes to the Medicare program involving reimbursements provided for services by hospitals, home health agencies, skilled nursing facilities, and physicians.

Ways and Means Committee Action Rancorous and highly partisan debate characterized both mark-ups, with the Ways and Means mark-up interrupted several times by protesters, who referred to the $1,800 out-of-pocket obligation as “the hole in the doughnut.”

Calling the legislation “the best bill for seniors that we have brought before this committee,” Rep. Johnson said, “We absolutely must get a bill through the House this year and to the President’s desk.”

Ranking Member Charles Rangel (D-NY) said the bill fell short. “For most of us, it appears that you are more concerned about subsidizing the insurance companies than you are about subsidizing the seniors,” he said, adding, “You can put lipstick on a pig but you can’t call it a lady.”

Democrats offered a number of amendments, most of which were defeated. The committee defeated, 16-23, the Democratic substitute offered by Rep. Pete Stark (D-CA). The Democratic substitute would have provided an estimated $800 billion benefit over ten years. The plan would have guaranteed a $25 monthly premium and a $100 deductible. Seniors would have been required to pay 20 percent of the costs up to $2,000, with the catastrophic limit kicking in full coverage at $2,000.

Another amendment, offered by Rep. Benjamin Cardin (D-MD), would have guaranteed a $35 premium, but the amendment was defeated by voice vote.

Rep. Xavier Becerra (D-CA) offered an amendment that would have provided assistance to low-income beneficiaries. The amendment was defeated by voice vote.

Rep. Jim McDermott (D-WA) offered an amendment that would have required private drug plans to provide coverage for all prescriptions. The amendment was defeated by voice vote.

Rep. Earl Pomeroy (D-ND) offered an amendment that would have extended the current payment rates to skilled nursing facilities. The bill would make cuts in payments to such facilities. The amendment was defeated, 15-23.

Rep. Sander Levin (D-MI) offered an amendment that would have eliminated a new home health copayment established by the bill. The amendment was defeated, 14-23.

Another amendment by Rep. Levin would have added a number of preventive services to the Medicare program, but the amendment was defeated, 14-23. The amendment would have expanded Medicare’s basic benefit package to include smoking cessation programs, counseling for post-menopausal women regarding menopause and appropriate treatments, vision and hearing screening, cholesterol and hypertension screening, expanded eligibility for bone density screening, medical nutrition therapy for persons with cardiovascular disease, and hypertension and cholesterol screening.

Additionally, the amendment would have eliminated the copayment and deductible for all preventive services currently offered and would have established a demonstration project to screen beneficiaries for clinical depression. Lastly, the amendment would have required the Institute of Medicine to conduct a study on the best practices in health promotion and disease prevention among Medicare beneficiaries.

Several amendments were approved, including an amendment by Rep. Cardin that would extend a Medicare demonstration program for modest-income beneficiaries. The amendment was accepted by voice vote. Another amendment by Rep. Dave Camp (R-MI) would extend Medicare coverage to cholesterol and lipid screening. The amendment was approved by voice vote.

Energy and Commerce Committee Action Saying that the legislation “will create a valuable new entitlement,” Committee Chair Billy Tauzin (R-LA) added, “The bill will deliver greater cost-savings to Medicare beneficiaries.”

Ranking Member John Dingell (D-MI) disagreed with the Republican’s characterization of their plan. “It probably won’t work, and even if it does, the benefit is clearly inadequate,” he said, adding, “Ours is a very simple plan designed to mesh with the Medicare program.”

During the four-day mark-up, the committee considered over 20 amendments, most of which were defeated. The committee did adopt, by voice vote, an amendment by Rep. Tauzin that would lower the catastrophic limit to $3,700 from $3,800.

The Democratic substitute, offered by Rep. Dingell, was defeated, 24-30. The amendment was identical to the Democratic substitute offered during the Ways and Means Committee mark-up.

Rep. Lois Capps (D-CA) offered an amendment that would have guaranteed a fallback government program for regions where there are limited prescription drug options. The amendment was defeated, 24-31.

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