Federal Healthcare Update

June 22, 2009

Pardon Our Dust

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The latest health care buzz in Washington has been focused on two recent developments.  The first was Friday’s release of the House Tri-Committee bill, which offers new details on its health care plan.  The second was Senate Finance Committee Chair Max Baucus’s (D-MT) announcement over the weekend that of a deal between drug makers and the White House to lower the price of medicine sold to seniors and the government.
House Tri-Committee Bill  
The House Tri-Committee bill, discussed in our last email, includes employer and individual mandates, an expansion of Medicaid, and a public option, with detailed plans for each.  What the bill does not include, however, is a plan to pay for it. Republicans continue to object on this front, saying that the House bill will bury the country in debt. Senate Minority Leader Mitch McConnell said on Friday, “Throughout this debate, the administration’s central argument has been that America needs health care reform for the sake of the economy. Yet according to independent estimates, every health care proposal Democrats on Capitol Hill have offered would only hurt the economy.”
Pharmaceutical Agreement
Also making news this week is an agreement between the White House and major pharmaceutical companies to dedicate $80 billion to lowering the price of drugs sold to seniors and the government over the next decade. The agreement creates these savings by closing a gap in Medicare drug coverage, which has been in place since 2006.  The Medicare prescription drug benefit plan currently charges seniors the full price of drugs once a patient has received $2,700 worth of drugs in a year, until the total reaches $6,100 and ‘catastrophic coverage’ kicks in.  President Obama has called this coverage gap a “continuing injustice,” and applauds the Pharmaceutical Research and Manufacturers of America (PhRMA), for agreeing to reduce costs by 50% on brand name prescription drugs that fall in the gap.  This is significant because it indicates the willingness of the pharmaceutical industry to be a partner in achieving health care reform. The timing of this announcement is also positive for the White House, as it comes on the heels of a week that saw some setbacks for advocates of health care reform. The discounts could save 3.5 million retirees up to $1,700 a year, according to the AARP, but the deal is contingent on enactment of a health care reform bill. President Obama held a press conference today with the AARP CEO Barry Rand to announce the agreement. 
The Week Ahead

The Senate HELP Committee will continue to mark up their health care reform bill this week, and is still working on language for employer mandates and a public option.   The Senate Finance Committee continues to work on its bill, aiming for a mark up to begin just after the July 4th recess.  On Wednesday, the President will hold a town hall on health care reform, to be broadcast on ABC.