Healthy Skepticism Library item: 1331

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Publication type: news

Hallam K.
Frist, Hastert, Kennedy Battle Over Favoring Insurers, Medicare
Bloomberg News 2003 Jul 7

Full text:

Republican leaders in the U.S. Congress will resist trimming incentives that encourage insurers such as Aetna Inc. to offer prescription-drug coverage as part of a Medicare overhaul, lobbyists and staffers said.

Lawmakers return today to Washington and will start the process of combining House and Senate versions of the $400 billion legislation. President George W. Bush, who’s running for re- election next year, is pressuring Congress to pass the biggest expansion in the U.S. health insurance program’s 38-year history.

House Speaker Dennis Hastert and Senate Majority Leader Bill Frist need to mollify 42 House Republicans, who are threatening to withdraw support amid concern that their bill will be softened to reduce the role of insurers. They’ll have to take on Senate Democrat Edward Kennedy, who played a major part in drafting the more government-reliant Senate bill.

Frist and Hastert “ represent high-level muscle to counter Ted Kennedy,’‘ said Jordan Schreiber, who manages about $700 million in the Merrill Lynch Healthcare Fund. “ They’ll fight down to the wire.’‘

Momentum created by the compromise at the core of the Senate’s bill and Americans’ call for relief from escalating drug expenses for the 40 million seniors enrolled in Medicare will force lawmakers to pass a measure this year, analysts said.

While Republicans and Democrats have reservations about how the bills create the benefit, “They all need to jump off the bridge together,’‘ said Paul Heldman, a policy analyst for Schwab Washington Research Group.

Under the House bill, Medicare beneficiaries in 2010 would be able go out into the market and buy drug coverage suiting their needs. The government would subsidize 73 percent of the policy’s premium, requiring seniors to pay the rest.

The Senate bill would give insurers $6 billion in incentives to offer drug coverage. Medicare would provide the benefit if two or more private plans aren’t available in a given region.

Lobbyists have held off on putting their weight behind either bill. And the Bush administration isn’t taking sides yet.

“ The president is pleased that both chambers passed a reform largely consistent with the framework’‘ Bush supports, White House spokesman Scott McClellan said.

Lawmakers also will have to decide whether a senior’s income should determine their eligibility for the benefit and if the bills’ cost will balloon as the baby-boom generation retires.

Frist Joining

Frist will be part of the conference between the two chambers to draft a compromise bill, spokesman Nick Smith said. Hastert hasn’t decided whether he will be directly involved, spokesman John Feehery said.

The other negotiators may be the authors of the House bill, Representative Bill Thomas, chairman of the Ways and Means Committee, and Billy Tauzin, the Energy and Commerce Committee chairman. Senator Charles Grassley, the Finance Committee chairman, and the panel’s senior Democrat, Senator Max Baucus, also will probably participate.

Frist and Hastert have to address the concerns of Republicans who have called the current Medicare system wasteful and vulnerable to fraud and want the private sector to assume more responsibility in providing health benefits.

Representative Paul Ryan, one of the 42 Republicans who signed a June 24 letter to Hastert urging him to retain the House provision promoting competition, said Medicare can’t function without competition from insurers.

“This is the only way to save Medicare for the baby-boom generation,’‘ the Wisconsin lawmaker said. He voted for the bill, which passed the House by 216-215 on June 27.

CBO Estimate

Republicans have said a Congressional Budget Office estimate that only 2 percent of the seniors enrolled in Medicare will choose to get their drug coverage through private plans under the Senate bill shows the need to boost the insurers’ role.

Democrats have suggested that incentives for insurers would weaken Medicare and force the elderly out of the program, which has proven better at controlling prices than the private sector.

Kennedy “ doesn’t see any room for compromise if we’re coercing seniors into a private plan,’‘ said Stephanie Cutter, a Kennedy spokeswoman.

Kennedy, who was elected in 1962, is one of three current senators who served during the original debate to create Medicare.

The Massachusetts lawmaker, who’s the senior Democrat on the Health, Education, Labor and Pensions Committee, last month abandoned his initial $700 billion proposal to back the $400 billion Senate bill. His support helped break a logjam that blocked the bill for six years.

“ This is the greatest action in a generation to mend the broken promise of Medicare,’‘ Kennedy said before the June 27 vote on the Senate bill. “ We’ve demonstrated a bipartisan effort here and I hope that would continue when we get into conference.’‘

Considering his influence among Democrats, Kennedy may sink the bill if he opposes it, a lobbyist said.

“ Kennedy brings so many votes with him,’‘ said Rick Pollack, executive vice president of the American Hospital Association.

“ He’s the difference between 76 and 51.’‘

If Kennedy leads a filibuster, Republicans would have to get 60 votes to end it.

Frist, a heart-transplant surgeon, has made health-care issues a priority since he was elected in 1994. He has worked on bills encouraging health-care providers to report medical errors and providing limited funding for stem-cell research.

The Tennessee Republican has said passing the prescription drug benefit is one of his biggest priorities this year.

Before becoming speaker in 1999, Hastert led the GOP task force on health care and was a member of the Energy and Commerce Committee, which oversees Medicare. Hastert also helped write a 1996 health care law to expand coverage to the uninsured.