- Jun 6, 2007
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Watching some of the Senate Finance Committee hearings on the mark-up of the Healthcare Reform Bill it is clear that America is fortunate that it has senators that are good human beings and have a great mastery of the health care subject. What is very disappointing though is that it seems the Democrat Senators on the committee see their job as only making sure that the final version of the bill that comes out of their committee doesnt exceed the cost of the initial version of the bill which is approximately $860 billion over ten years. I think there is a lot of Americans that hope the Democrat senators on this committee would view their job as reducing the cost of this bill to the greatest degree possible. Many Americans think to themselves that government projections on federal program costs have an extensive track record of being dramatic underestimations so Congress better start with a piece of legislation as low cost as possible. This is especially relevant with this healthcare initiative which is so vulnerable to a rise in costs, what will happen if a significant number of U.S. employers in the future stop offering health insurance, what will happen if yearly health care insurance premiums increase even at a higher rate than the overall inflation rate than they have in recent years, what if the unemployment rate stays persistently high and depresses wage income in America if one is honest one must conclude that the government cant really know the cost of this legislation. To this end, I think many Americans hope that the Senate Finance committee will go through this bill with a fine tooth comb and cut out all the costs where there isnt a compelling case for having such costs in the bill considering the nation is facing a $9 trillion dollar budget deficit over the next ten years. If this senate finance committee bill is anything like the house healthcare bills there are plenty of areas for prudent cost cutting.
The other thing which is striking in watching the Senate Finance Committee on the mark-up hearing for this bill is the lack of structure, it makes one think how are they ever going to get all the work done they have to. What is there something like 500 amendments to the bill at the rate the committee is going it seems like the timetable to complete the bill should not be specified in weeks but months. One would expect a structure where the sponsor of an amendment would have seven minutes to discuss the bill other members of the committee would each have four minutes to discuss the bill than the committee would move to the next amendment and the process would repeat and committee members would have three hours to submit their ballot (which indicates their vote) on the amendment from the time the discussion was closed on the amendment.
A perfect example of the need to change their cost perspective on this bill for Democrats was exhibited considering an amendment that arose at the end of Mondays hearing. Democrat senators raised a great initiative. Currently, seniors that are dual eligible for Medicare and Medicaid (low-income seniors) purchase their drugs through a Medicare program. It used to not be that way, before the Bush Administration created Medicare Part D, the drug benefit program for seniors, dual eligible seniors used to buy their drugs through Medicaid. This is important because the Federal Government pays a higher price for drugs purchased through Medicare as compared with Medicaid, the estimation is that the Federal government will pay $86 billion dollars more over ten years. Okay, the obvious prudent action the finance committee should take is to reverse the law and save the American taxpayers $86 billion dollars. Unfortunately this is not what the Democrat senators on the finance committee want to do. Yes, they want to reverse the law, but they want to take something like $50 billion dollars of this savings and spend it on closing the doughnut hole in the Medicare Part D drug benefit. The intentions here by these senators are good, to lessen the financial burden of paying for drugs for seniors, but that is not the job of Congress at this point. At this point in the process of health care reform in American, the governments job number one is to solve the health insurance problem in America adding benefits that cost the government more money shouldnt be on Congresss radar screen. A few years from now when America Health care problems are under control, sure.
Furthermore, the perspective on this problem amongst some senators isnt ideal on this doughnut hole problem. The doughnut hole problem refers to seniors in the Medicare Part D program, basically the issue is that for the first two-thousand dollars of drug purchases by a senior over the course of a year the government picks up 75% of the costs and the senior pays 25% of the cost, once the $2000 threshold is reached the senior pays 100% of the costs until that seniors total purchases reach $ 5000 and then the senior only has to pay something like 10% of drug costs and the government picks up the balance. What some of these senators are fully not appreciating is that because of this health care reform initiative which has been transpiring in the country, drug companies have agreed to give seniors a 50% discount on drug purchases while the senior is in the doughnut hole. As a practical matter what this means is that there is no more doughnut hole in this $2000 to $5000 price gap instead of seniors getting 75 % relief in drug costs they will get 50 %. These senators arent really focusing on the fact that seniors are getting a great added benefit here with this deal with the drug companies, Congress has done enough for that problem for the present time. Also, the committees discussion seemed unbalanced in all the compassion for the drug companies over the reversal of the Medicare/Medicaid dual eligibility rule and how this will cost drug companies an additional $86 billion dollars and this violates the deal made with them where they agreed to give seniors in the doughnut hole a 50% discount which will cost them like $80 billion dollars. No senators mentioned that this doughnut hole deal isnt a complete act of selflessness on the drug companies part they will sell more drugs to seniors in the doughnut hole because it will costs those seniors less for drugs and more seniors will pass through the doughnut hole because seniors get credit for the fifty percent discount in calculating whether they passed through which means that because drugs are so much cheaper to seniors once they pass through the doughnut hole drug companies will likely sell even more drugs to that group of seniors.
Democrat senators need to refocus their efforts to cut costs on this healthcare reform bill. Otherwise, this healthcare reform bill will be to Democrats what the Iraq War was to Republicans a milestone around their necks which represents an unnecessary initiative which really hurt America financially and will cause the Democrats to drown politically.
The other thing which is striking in watching the Senate Finance Committee on the mark-up hearing for this bill is the lack of structure, it makes one think how are they ever going to get all the work done they have to. What is there something like 500 amendments to the bill at the rate the committee is going it seems like the timetable to complete the bill should not be specified in weeks but months. One would expect a structure where the sponsor of an amendment would have seven minutes to discuss the bill other members of the committee would each have four minutes to discuss the bill than the committee would move to the next amendment and the process would repeat and committee members would have three hours to submit their ballot (which indicates their vote) on the amendment from the time the discussion was closed on the amendment.
A perfect example of the need to change their cost perspective on this bill for Democrats was exhibited considering an amendment that arose at the end of Mondays hearing. Democrat senators raised a great initiative. Currently, seniors that are dual eligible for Medicare and Medicaid (low-income seniors) purchase their drugs through a Medicare program. It used to not be that way, before the Bush Administration created Medicare Part D, the drug benefit program for seniors, dual eligible seniors used to buy their drugs through Medicaid. This is important because the Federal Government pays a higher price for drugs purchased through Medicare as compared with Medicaid, the estimation is that the Federal government will pay $86 billion dollars more over ten years. Okay, the obvious prudent action the finance committee should take is to reverse the law and save the American taxpayers $86 billion dollars. Unfortunately this is not what the Democrat senators on the finance committee want to do. Yes, they want to reverse the law, but they want to take something like $50 billion dollars of this savings and spend it on closing the doughnut hole in the Medicare Part D drug benefit. The intentions here by these senators are good, to lessen the financial burden of paying for drugs for seniors, but that is not the job of Congress at this point. At this point in the process of health care reform in American, the governments job number one is to solve the health insurance problem in America adding benefits that cost the government more money shouldnt be on Congresss radar screen. A few years from now when America Health care problems are under control, sure.
Furthermore, the perspective on this problem amongst some senators isnt ideal on this doughnut hole problem. The doughnut hole problem refers to seniors in the Medicare Part D program, basically the issue is that for the first two-thousand dollars of drug purchases by a senior over the course of a year the government picks up 75% of the costs and the senior pays 25% of the cost, once the $2000 threshold is reached the senior pays 100% of the costs until that seniors total purchases reach $ 5000 and then the senior only has to pay something like 10% of drug costs and the government picks up the balance. What some of these senators are fully not appreciating is that because of this health care reform initiative which has been transpiring in the country, drug companies have agreed to give seniors a 50% discount on drug purchases while the senior is in the doughnut hole. As a practical matter what this means is that there is no more doughnut hole in this $2000 to $5000 price gap instead of seniors getting 75 % relief in drug costs they will get 50 %. These senators arent really focusing on the fact that seniors are getting a great added benefit here with this deal with the drug companies, Congress has done enough for that problem for the present time. Also, the committees discussion seemed unbalanced in all the compassion for the drug companies over the reversal of the Medicare/Medicaid dual eligibility rule and how this will cost drug companies an additional $86 billion dollars and this violates the deal made with them where they agreed to give seniors in the doughnut hole a 50% discount which will cost them like $80 billion dollars. No senators mentioned that this doughnut hole deal isnt a complete act of selflessness on the drug companies part they will sell more drugs to seniors in the doughnut hole because it will costs those seniors less for drugs and more seniors will pass through the doughnut hole because seniors get credit for the fifty percent discount in calculating whether they passed through which means that because drugs are so much cheaper to seniors once they pass through the doughnut hole drug companies will likely sell even more drugs to that group of seniors.
Democrat senators need to refocus their efforts to cut costs on this healthcare reform bill. Otherwise, this healthcare reform bill will be to Democrats what the Iraq War was to Republicans a milestone around their necks which represents an unnecessary initiative which really hurt America financially and will cause the Democrats to drown politically.
