61 House members (led by Peter Welch, D/VT) have introduced a bill calling for direct Part D price negotiations -- despite the fact that health care reform legislation is moving ahead in Congress without such a provision (due in no small part to the “deal” cut by the White House and PhRMA).
The bill is essentially the same as the amendment, also sponsored by Welch, included in the health care reform legislation passed by the House last summer. However, a price negotiation provision is not part of the Senate bill on health reform, which has become the primary vehicle for passing health reform through Congress.
The Welch bill does not provide HHS with the authority to establish a national formulary. The Congressional Budget Office has consistently concluded that empowering HHS to negotiate prices, without also providing the secretary with authority to set up a national formulary, would not produce savings to the government.
As Stanford economists Alain Enthoven and Kyna Fong have explained, when discussing Medicare Part D, “Government price negotiation could leave people without drugs that manufacturers decide aren’t sufficiently profitable under the plan.”
That’s exactly what has happened under the health insurance program run by the Department of Veterans Affairs, which is already empowered to directly negotiate prices with drug producers.
Of the 300 most prescribed drugs among Americans 65 and older, the VA only covers 65 percent of them, according to a study from the Lewin Group. By contrast, the two most popular plans in the Medicare Part D drug benefit — where private insurers compete for customers — each cover 94 percent of those medicines.
In fact, over a third of retired veterans supplement their VA coverage by enrolling in Part D
The Part D model hasn’t sacrificed cost-savings for choice, either. The competitive pressures among participating insurers have lead to a 17 percent drop in out-of-pocket spending for seniors who enrolled in the program in 2006 — that’s equivalent to 14 extra days of medicine a year.
Moreover, Part D’s total expenses over the next decade are expected to be nearly $120 billion less than originally estimated when the program was created.
Mr. Welch and friends are hoping to have the bill move in tandem with the final push to pass health care reform legislation or be added to the package of "fixes" being planned for the Senate bill.
Add this to the growing list of reasons why “reconciliation” is both phony and dishonest.
The bill is essentially the same as the amendment, also sponsored by Welch, included in the health care reform legislation passed by the House last summer. However, a price negotiation provision is not part of the Senate bill on health reform, which has become the primary vehicle for passing health reform through Congress.
The Welch bill does not provide HHS with the authority to establish a national formulary. The Congressional Budget Office has consistently concluded that empowering HHS to negotiate prices, without also providing the secretary with authority to set up a national formulary, would not produce savings to the government.
As Stanford economists Alain Enthoven and Kyna Fong have explained, when discussing Medicare Part D, “Government price negotiation could leave people without drugs that manufacturers decide aren’t sufficiently profitable under the plan.”
That’s exactly what has happened under the health insurance program run by the Department of Veterans Affairs, which is already empowered to directly negotiate prices with drug producers.
Of the 300 most prescribed drugs among Americans 65 and older, the VA only covers 65 percent of them, according to a study from the Lewin Group. By contrast, the two most popular plans in the Medicare Part D drug benefit — where private insurers compete for customers — each cover 94 percent of those medicines.
In fact, over a third of retired veterans supplement their VA coverage by enrolling in Part D
The Part D model hasn’t sacrificed cost-savings for choice, either. The competitive pressures among participating insurers have lead to a 17 percent drop in out-of-pocket spending for seniors who enrolled in the program in 2006 — that’s equivalent to 14 extra days of medicine a year.
Moreover, Part D’s total expenses over the next decade are expected to be nearly $120 billion less than originally estimated when the program was created.
Mr. Welch and friends are hoping to have the bill move in tandem with the final push to pass health care reform legislation or be added to the package of "fixes" being planned for the Senate bill.
Add this to the growing list of reasons why “reconciliation” is both phony and dishonest.
