What You Need to Know
- Savings on Medicare drug spending could pay for other items.
- Democrats appear to disagree about how to cut Medicare drug spending.
- That conflict could limit the size of the final social spending package.
Sometimes watching the legislative process can be confusing. The current budget reconciliation process certainly looks confusing.
However, if you look closely there are a few sign posts to watch for Medicare expansion and drug negotiations.
What we know at this writing, is that the policy fight between moderate and progressive Democrats about the big social spending package will mean that bold, expansive action on these two elements, is not likely.
In addition, Democrats expected to pay for Medicaid and Medicare expansions, and extend the premium subsidies that assist middle-income individuals and families purchase insurance with savings from drug negotiations.
So how the drug negotiation provisions end up, could shape the three other health care initiatives.
Allowing the government to negotiate for drug prices has had a 20-year tortured history. It became a battle cry after the passage of the Medicare Part D prescription drug benefit.
Sen. Ron Wyden, D-Ore., was instrumental in the design and passage of the Medicare drug benefit. He also was one of the first members of Congress to introduce a bill to allow the government to negotiate drug prices for Medicare patients, shortly after the drug benefit was passed.
Now Wyden is chairman of the Senate Finance Committee, the committee with jurisdiction over the issue in the Senate. He would be aware of three facts:
- Moments to pass truly game changing legislation like drug negotiations are fleeting, and now may be the time that Congress allows some form of drug negotiations.
- R. 3, the House proposal that would allow negotiations of up to 250 Part D drugs, among other provisions, achieves $500 billion in savings. Even if this provision is pared down, its savings are needed.
- With paper thin margins, it takes only one senator and only three House members to derail a provision.
Wyden has pointed out that often when there is a congressional change in a program the private sector finds a way to benefit without specific statutory authority to allow them to do so. Under that logic, if Medicare were provided some authority, the assumption would be the private sector can find a way to benefit from those rates for their plans.
One Democratic senator reportedly does not appear to have the same view of drug negotiations that other Democrats have. That is Kristen Sinema of Arizona. Finding a way for her to support something in this area will be crucial.