Democrats and Health Care

With a new Congress comes new opportunities for our industry to move our policy agenda forward on Capitol Hill.

The Democrats control a majority in both chambers for the first time since the 103rd Congress in 1993-1995. Democrat Nancy Pelosi became the first woman to serve as Speaker of the House. With a decided 233-202 majority, the Democrats have dramatically changed the political dynamics in the House of Representatives.

With these numbers, House Democrats are capable of moving their agenda forward, as evidenced by their first week back in session in early January. During the first 100 days of the new 110th Congress, the Democrats delivered on campaign promises when the House easily passed several key bills.

The Democrats' bill (H.R. 4) requiring the federal government to negotiate directly with pharmaceutical manufacturers for drugs provided under the Medicare Part D drug benefit passed by a vote of 255-170. The measure would change the benefit to require the Secretary of Health and Human Services to negotiate prescription drug prices that beneficiaries receive under the benefit directly with pharmaceutical manufacturers. It would also bar the government from setting up a formulary or restricting access to drugs as a way of leveraging lower prices.

The original Medicare drug benefit law, passed as part of the 2003 Medicare Modernization Act, bars the federal government from being involved in negotiations by the private health insurance plans that run the programs.

Prospects for passage of this prescription drug bill are far less certain in the Senate, where Democrats enjoy only a 51-49 majority. Even if the Senate were to pass the measure, President Bush has pledged to veto it.

Washington insiders see the House passage of this prescription drug bill as just the first front in the Democrats' battle with the health care industry. A likely next target on the list is the insurance companies, which will be faced with demands for cuts in their Medicare subsidies under the Medicare Advantage program.

As part of the 2003 Medicare drug benefit legislation, the Republican Congress sought to infuse more private-sector involvement into the program by dramatically increasing federal payments to private insurance plans operating in Medicare Advantage. In that part of Medicare, private insurers provide beneficiaries a package of medical benefits as an alternative to the traditional Medicare Parts A and B programs.