Senators Reject Bid to Cut Drug Prices for Low-Income Seniors

WASHINGTON - JANUARY 08: (L to R) Committee Ch...

I am just reporting this for Big Pharma. I'm not glad that it affects those whocan't afford healthcare but at the same time what does Medicare cover these days when seniors can't afford their meds. It's a mess but expect the BioPharma Indexes rising this week.

Senators Reject Bid to Cut Drug Prices for Low-Income Seniors
WASHINGTON – An amendment to health-care legislation that would have cut drug prices for low-income seniors, imposing billions of dollars in new costs on the pharmaceutical industry, failed in a vote by the Senate Finance Committee on Thursday.

The measure would have allowed Medicare to purchase drugs for low-income seniors at the same price that Medicaid pays for the drugs, which the nonpartisan Congressional Budget Office estimated would have resulted in a loss of $106 billion over 10 years to drug makers.

Florida Democratic Sen. Ben Nelson wanted to use the money to close the Medicare prescription coverage gap. But it would have been on top of $80 billion in reduced fees that the industry already had agreed to.

Committee chairman Sen. Max Baucus (D., Mont.) cited the agreement in voting against the amendment. The amendment was rejected by a 13-10 vote. All of the panel's Republicans voted against it, as did three Democrats.

The vote came as the committee on Thursday held its third day of deliberations on health-care legislation, wading slowly through amendments to its proposed version of the bill.

Republicans sought to bring proposed cuts to privately run Medicare plans, known as Medicare Advantage plans, to the forefront.

The committee voted along party lines to reject an amendment by Sen. Orrin Hatch (R., Utah) that would have delayed coverage for the uninsured if a million or more people who now have insurance wound up having to pay higher premiums as a result of the legislation.

Mr. Hatch said his amendment was intended to protect seniors who signed up for private insurance plans through Medicare and could lose some benefits as a result of cuts to the commercial plans. About 10 million seniors are now signed up through the private plans, about one-fourth of Medicare recipients. The "Medicare Advantage" plans can offer enhanced benefits because the government pays them more than it costs to care for seniors in traditional Medicare.

Additional, difficult challenges are certain as Mr. Baucus tries to shepherd the measure toward a vote this fall in the full Senate.

Some committee members want to ease cuts in future payments to hospice, home health care and other service providers under Medicare, a key source of funding for the legislation.

And Sen. Kent Conrad (D., N.D.) said additional work needs to be done to make insurance more affordable for lower-income families.

With polls showing seniors are skeptical about President Barack Obama's call for legislation, Democrats said the bill included numerous provisions to enhance benefits under Medicare, and Mr. Baucus said it would improve the solvency of the financially strained Medicare trust fund.

The Finance Committee is the last of five congressional panels to debate health-care legislation that is atop Mr. Obama's domestic agenda. While the bill omits several provisions backed by liberals, Mr. Baucus hopes to hold support from all Democrats on the panel, and perhaps pick up support from Republican Sen. Olympia Snowe of Maine as well.

Ms. Snowe has yet to disclose her intentions, and while she sometimes sided with fellow Republicans during the day, she also voted with Democrats at other points.

.At its core, the bill is designed to expand health insurance coverage to millions of people who lack it, employing a new system of federal subsidies for lower-income individuals and families and establishing an insurance exchange in which coverage would have federally guaranteed benefits. Insurance companies would be prohibited from refusing to sell insurance based on an individual's health history, and limits would be imposed on higher premiums based on age.

At the same time, Mr. Baucus -- in keeping with Mr. Obama's wishes -- drafted legislation that would reduce the skyrocketing rate of medical spending overall. The bill's price tag is less than $900 billion over a decade.

Legislation already has cleared three committees in the House, and the leadership is slowly piecing together changes that could lead to a vote next month.

Senate Majority Leader Harry Reid (D., Nev.) has said he intends to bring legislation to the Senate floor as soon as possible.

Whatever measure emerges from the Finance Committee must be blended with a bill that cleared the Senate Health, Education, Labor and Pensions Committee several weeks ago.

Meanwhile in the House, Democratic leaders continued to seek to win support from conservative party members for a public insurance plan. One proposal under consideration: increasing Medicare payments to providers in rural areas.

Some have proposed basing payment rates under a public plan on rates paid by Medicare. But lawmakers from rural areas have long complained that the current Medicare rate structure shortchanges rural providers.

"If Medicare rates were adjusted, there would be less resistance to tying the public option to Medicare rates," said Rep. Sander Levin, (D., Mich.)

Rep. Earl Pomeroy (D., N.D.) said addressing regional disparities in Medicare would temper his objections to the public option.

One version of the House bill backed by some conservative Blue Dog Democrats says that rates would be negotiated separately. But that structure would add about $65 billion in cost to the bill compared with a plan that was pegged to Medicare rates.
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