There is an amendment (PDF) below the fold. It’s from pages 117-118 of the Senate Finance Committee’s list of amendments related to reforming the health care delivery system (as opposed to amendments related to expanding health care coverage or amendments related to financing comprehensive health care reform). Those categories can be kind of arbitrary.
In any case, the amendment was offered tonight by Sens. Bill Nelson of Florida and Jay Rockefeller of West Virginia. To save you the trouble of deciphering congressional legalese, I will give a simple explanation of what this amendment is intended to address.
Before I do, though, I just want to note that this appears to be the only amendment that the Finance Committee managed to get to tonight, and that they didn’t even have time to vote on it before adjourning. Orrin Hatch performed an hour and half filibuster by insisting on his right to ask unlimited questions of the committee staff. By the end, I think everyone in the room was ready to bludgeon Hatch with a chair except for some of the more immature colleagues on his side of the aisle. If you watched it, you know what I’m talking about.
In any case, there are people who qualify for Medicaid because they have a low income. And there are people who qualify for Medicare because they are 65 years-old. Then there are people who qualify for both, and they are called ‘Dual Eligible Individuals.’ Prior to the adoption of the Medicare Part D prescription drug program, people on Medicaid were able to purchase drugs at a low cost because of bulk purchasing by the government. This is still true…except for the people on Medicaid who are also eligible for Medicare Part D. Those individuals, like everyone else in Part D, do not benefit from bulk purchasing and have to pay a higher rate. How much higher? Well, just reversing this change would save the government over $85 billion dollars. That’s almost enough money to fight for two more years in Iraq.
The Nelson-Rockefeller amendment eliminates this problem by restoring the previous situation where all members of Medicaid get Medicaid pricing on pharmaceuticals. It also phases out the infamous donut hole, where seniors are forced to pay 100% out of pocket costs on drugs between roughly $2700-$5000 despite having to pay premiums for coverage.
I hope that isn’t too complicated to understand. These changes would save the government over $85 billion dollars in subsidies and payouts to the drug companies. Seniors would no longer get hosed in the donut hole. And everyone else would get a break on paying for other people’s subsidies.
It makes a lot of sense unless you are a drug company, a Republican, or Democrat Tom Carper of Delaware. Sen. Carper is upset by this amendment because the Senate entered into a deal with PhRMA five years ago to give them this sweet multi-billion dollar giveaway. And despite the fact that it was the Bush administration and the Republicans who cut this farce of a deal (with basically no Democratic input or consent), Sen. Carper thinks it is wrong to renege on a deal.
I wish we could send an edited tape of the relevant parts of this hearing to every senior citizen of Delaware so that they could understand just how shamelessly in the hip pocket of Big Pharma their senior senator is.
Senator Jay Rockefeller was absolutely incredulous at the arguments Tom Carper made. If there is a capacity for shame in the soul of Mr. Carper, he is filled with it tonight. But I hope we can immortalize that shame. Let the video masters find the tape and do some editing. Let’s send it far and wide to seniors in Delaware. And then let’s primary this guy. His shit can’t stand the light of day.
Nelson-Rockefeller Amendment #D-1 to the America’s Healthy Future Act of 2009
Short Title: Eliminate the Part D Coverage Gap and Require Drug Maker Rebates for Full-Benefit Dual Eligible Individuals
Description of Amendment: Amends Section 1860D-2 of the Social Security Act by phasing-out the Medicare Part D coverage gap and requiring drug manufacturers to provide rebates for full benefit dual eligible beneficiaries that match Medicaid rebates.
Every year, beginning in 2011, the initial coverage limit will be increased and the out-of-pocket threshold will be decreased until the coverage gap is closed. The initial coverage limit,
otherwise computed without regard to the phaseout, will be increased by half the cumulative phase-in percentage times the out-of pocket gap amount for the year. The annual out-of-pocket threshold, otherwise computed without regard to the phaseout, will be decreased each year by half the cumulative phase-in percentage of the out-of-pocket gap amount for the year multiplied by 1.75. The cumulative phase-in percentage will be calculated by adding the annual phase-in percentage for the year and all previous years beginning in 2011, but cannot exceed 100 percent.The annual phase-in percentages are: for 2011, 13 percent; for 2012 through 2015, 5 percent; for 2016 through 2018, 7.5 percent, and for 2019 and each subsequent year, 10 percent. The out-of-pocket gap amount is defined as the amount by which the annual out of pocket threshold (as determined without regard to the phaseout) exceeds the sum of the annual deductible plus ¼ of the amount by which the initial coverage limit (as determined without regard to the phaseout) for the year exceeds the annual deductible.
Offset: Require Part D Drug Rebates for Dual Eligible Individuals. Drug manufacturers, as a condition of having any of their drugs covered under Part D, are required to provide the Secretary of Health and Human Services with a rebate for any drug covered under Medicare Part D dispensed to any full-benefit dual eligible after December 31, 2010. This provision applies to drugs used by dual eligible individuals enrolled in Prescription Drug Plans run by Part D sponsors and MA-PD plans administered by MA organizations. The size of the rebates is defined as the amount (if any), by which the average Medicaid drug rebate (as modified by this statute, and including both the basic and inflation rebates) for each unit of the drug exceeds the average per-unit rebate, discount, or price concession provided to Part D sponsors and MA-PD plans administered by MA organizations drugs used by dual eligibles, multiplied by the number of units of the drug provided to dual-eligibles by Part D or MA-PD plans. Part D prescription drug plans (PDPs) and Medicare Advantage plans must make confidential reports to the Secretary on the drugs dispensed, the price rebates given, the extent to which rebates are available to dual eligible and non-dual eligible Medicare beneficiaries, and any other information needed by the Secretary to calculate the rebate amount needed. Confidentiality provisions similar to those that already apply to the Medicaid drug rebate will apply to the data provided under the Part D rebate program. The Inspector General of the Department of Health and Human Services may use this information to conduct audits, investigations and evaluations.
The plans are subject to a $10,000 per day civil money penalty for failing to provide these information reports and a $100,000 civil money penalty for providing false information in their reports. The rebates are to be deposited into the Medicare Prescription Drug Account and used to pay for all or part of the gradual elimination of the Part D coverage gap.
The Chairman‘s Mark provision on improving coverage in the Part D coverage gap is modified so that pharmaceutical manufacturers are required to give discounts on drugs used in the donut hole as if it existed without regard to the phaseout. Discounts provided in the portion of the donut hole that has been closed by the phaseout will be used to reduce the cost of the phaseout.
