Legislative Text and CBO Estimates of Medicare Conference Agreement

The Ways and Means Committee has posted the legislative text of the Medicare conference agreement. Here is a link to the text on the CentristPolicyNetwork.Org site. Here is the link to the text on the Ways and Means Committee site. (If one site is busy, try the other...)

The actual legislative language is vital for the dozens (hundreds really) of smaller items included in this vast package. It will be the final look at how various health care providers (hospitals, doctors, HMOs etc.) would be paid under the proposal.

The Congressional Budget Office (CBO) cost table was also published this afternoon. Later in the evening, CBO released a letter to Sen. Nickles, with four additional tables: Table 1 (detailed cost of drug benefit), Table 2 (misc Part D and Part B info.), Table 3 (state Medicaid outlays), and Table 4 (eligibility for low-income subsidies).

For years, the "big deal" on Medicare was: drug benefits for reform. If liberals could swallow competitive reforms, conservatives would offer a drug benefit. If conservatives could live with a drug benefit, liberals would swallow competitive reforms.

That original deal would have involved lots of tough policy thinking. How to set up competition; how to create a drug benefit.

But the deal has changed. Now the deal doesn't really involve liberals.

The new Medicare deal is with conservatives only. The deal is: Vote for a drug benefit in exchange for the right to run campaign ads lambasting your Democratic opponent for voting against a drug benefit that was supported by the largest senior citizens' group, AARP.

Policy isn't quite so important in the new Medicare deal. It doesn't matter so much whether or not the drug benefit works. Competition is just a demonstration -- sort of an afterthought. The main thing was to put together a package that could get that AARP support, and then get liberals on the record in opposition as quickly as possible.

Of course, the bill does several good things, mostly involving payment corrections to health providers. There are actually several sound precursor steps toward market competition among health plans in the bill. But there is plenty of work to be done on the core issues of competition and drug benefits over the next couple years, regardless of whether or not this bill passes.

If the conference agreement passes -- and it probably will -- centrists will have to get to work on job #2: making sure the drug benefit actually works. If the drug benefit doesn't get off the ground, either because private companies don't want to provide it or seniors don't sign up or seniors with retiree coverage rebel, Medicare reforms based on the concept of private sector involvement and market competition will be discredited. (Job #3 is larger-scale competitive Medicare reforms, which will be right back on the table in a couple years as the baby boomer generation creeps closer to retirement.)

If the bill doesn't pass, low-income seniors, seniors with high-drug costs, and seniors who don't have any group purchasing opportunities or discount cards will be left out in the cold, listening to the political blame game and wondering whether or not this whole debate was really about them in the first place.

Either way, we'll have a lot of additional legislating to do in 2004 if this bill doesn't pass or, more probably, in 2005, when it becomes clear that this drug benefit needs additional legislative work.

Right off the bat, we're working on ideas to expand the scope of the drug benefit to include other "gap" benefits many seniors want, like coverage of hospital deductibles or outpatient coinsurance. A restructured, federally subsidized market for gap coverage (including drugs) sounds like something private plans would be very interested in offering. It would probably be more popular with seniors than the stand-alone drug benefit created in this year's legislation.

But first to read the legislative language...

Links:
CentristPolicyNetwork.Org 2003 Medicare Resource Page
Text of Legislative Language of Medicare Conference Agreement (Ways and Means Committee link)
Text of Legislative Language of Medicare Conference Agreement (CentristPolicyNetwork.Org link)
Congressional Budget Office Letter to Honorable William "Bill" M. Thomas on direct spending and revenue impact of H.R. 1 (subject to review of final legislative language)

Posted by Jeff Lemieux at November 20, 2003 03:30 PM