Medicare Prescription Drug Bill Dissed By Conservatives and Liberals

By Christine Hall | July 7, 2008 | 8:29 PM EDT

( - With Congress back from August recess, the heat is on House and Senate conferees to come up with a Medicare prescription drug plan that can garner enough support from conservative and liberal factions in Congress to pass. Conferees are scheduled to resume negotiations on Thursday, but opposition to the plan has been mounting.

Back in June, 19 House conservatives voted against the drug bill, which passed by just one vote. Now a handful of conservative health care analysts are urging Congress to scrap the current plan altogether.

Bob Moffit of the Heritage Foundation and Merrill Matthews of the Council for Affordable Health Insurance (CAHI) warn that the drug benefit plan will result in counterfeit drugs flooding the U.S. market, backdoor government price controls, higher drug prices and a potential bonanza for trial lawyers.

A group of liberal activists associated with the Alliance for Retired Americans is also launching a campaign against the drug plan.

Rep. Pete Stark (D-Calif.), a senior Ways and Means Democrat, railed against the Medicare drug bill Wednesday at the Alliance's Washington, D.C. conference. He said Democrats want more drug costs paid for by taxpayers and less by Medicare beneficiaries.

"The House drug bill ... doesn't say anything about defining a benefit," Stark said, explaining Democratic objections. "It does talk about an approximate deductible, but that's all."

"The Senate and the House bills are a little bit different but will pay approximately 20 percent of the cost and the beneficiaries will pay 80 percent of the cost," said Stark. "They (Republicans) are hosing you," Stark warned.

Stark raised a concern shared by conservatives, a Congressional Budget Office analysis predicting that a Medicare drug plan will give employers incentive to drop existing drug coverage they now offer to seniors. But Stark accused Republicans of trying to "privatize" and "end Medicare."

Stark said Democrats aren't concerned about how to pay for drug costs, because they could be at least partly offset by reinstating the federal inheritance tax and raising payroll taxes about 1 percent.

But at present, conferees will have to address a long list of Republican intra-party concerns, starting with one raised by Senate Finance Committee Chairman Charles Grassley (Iowa).

Grassley suspended House-Senate staff talks last week out of frustration that the House side had not guaranteed that $25 billion earlier slated for rural hospitals and health care providers would be included in conference negotiations.

"There are going to be several more months before this fully plays out," predicted Tom Miller of the Cato Institute.
"At times I've thought nothing would pass, at times I've thought something bad would pass, at times I've thought there was a tiny chance that you could get something that was only terrible rather than horrible," said Miller.

See Earlier Stories:
Analysts Warn of Prescription Drug Disasters (Aug. 01, 2003)
Gingrich Recommends 'Transformation' of Medicare (Aug. 19, 2003)