Senate Finance Medicare Reform Hearings To Begin In February

The Senate Finance Committee expects to hold hearings in early- to mid-February to address the need for Medicare reform legislation, including the addition of a prescription drug benefit.

The committee said it will hold two hearings to discuss both the Breaux/Frist premium support model introduced in February and President Clinton's proposal to administer a drug plan using pharmacy benefit management companies.

A new version of the President's proposal is expected to be released before the committee meets.

The primary sponsor of the Senate premium support Medicare reform bill, Louisiana Democrat Breaux believes that the committee could mark up a bill by early spring.

Speaking at a Jan. 11 Medicare forum sponsored by The Atlantic Monthly and the Pharmaceutical Research & Manufacturers of America, Breaux maintained that the Breaux/Frist approach has a chance to emerge from committee fundamentally intact.

Breaux acknowledged that "obstacles are clearly there with the Presidential election cycle," but maintained that there nevertheless could be "some significant movement in a very positive sense."

"Medicare has always been a political football because of the nature of the subject matter," Breaux said. "I know members of Congress who have said to me that they do not want us to solve Medicare this year because it is such a...wonderful political issue."

"The problem with that is that we are arguing about failure," Breaux declared. "I think the American public would prefer our arguing being centered around a successful restructuring of the program, the argument being who did it."

If the Finance Committee can move a bill out to the floor, it could have a very good chance in the full Senate, Breaux contended. Breaux said that 46 Senate votes for a more controversial Medicare proposal during the Clinton health care reform debate in 1994 indicates that there is latent support for reform.

"I think that the Senate has already wrestled with some of those difficult votes and actually taken them."

Prospects in the House are less attractive, Breaux acknowledged. Rep. Thomas (R-Calif.), who co-authored a premium support proposal with Breaux on a bipartisan Medicare commission, has yet to introduce a bill. Thomas was originally scheduled to be part of The Atlantic Monthly forum but did not attend.

The pharmaceutical industry continues to expect Thomas to introduce a premium-support based bill similar to Breaux's proposed legislation.

Thomas is facing a key staff departure when Ann-Marie Lynch joins PhRMA at the end of January (¹ ).

PhRMA will be endorsing an incremental drug benefit approach to Medicare reform in 2000, although the association remains a proponent of the comprehensive reform model espoused by Breaux/Frist (² (Also see "PhRMA Moves To Head Off Clinton Assault; Considers Incremental Rx Benefit" - Pink Sheet, 17 Jan, 2000.)).

"Politically, it may be better just to add prescription drugs to a program that's going broke," Breaux observed.

"But I would suggest that to do so without fundamentally addressing the problems of Medicare will not serve the American public very well."

Heritage Foundation Economic Policy Studies Director Robert Moffit maintained that bipartisan support is growing for legislation along the lines of the Breaux/Frist bill, which is modeled after the Federal Employee Health Benefits Program.

"I think it is pretty clear that there is a large and growing bipartisan consensus on reforming Medicare for the next generation based on the positive experience of [FEHBP], a system of consumer choice and competition," Moffit said. "So I think the bipartisan consensus is, in fact, already there."

Senate passage of a Medicare reform bill, Breaux noted, would put pressure on the House "to at least move forward with something in the nature of comprehensive legislation."

"Whether that can be all packaged up and signed, I would say the chances are less than 50/50," Breaux conceded. "But I think the chances of something passing the Senate are better than 50/50."