Experts Analyze Prospects for Medicare Conference Committee Product

The American Enterprise Institute held a health policy discussion today entitled, ?Can Congress Reach Agreement on a Medicare Drug Benefit? Policy, Politics, and the Presidential Election.? Speakers included Norman Ornstein and Joe Antos of AEI and Gail Wilensky of Project Hope. Karlyn Bowman of AEI moderated the discussion.

Norm Ornstein outlined three potential outcomes of the conference committee. Under the first scenario, the conference committee faces gridlock and no bill emerges. In the second scenario, the White House and Senate Republicans would push for the Senate bill and go to moderate House Democrats for support, abandoning the more conservative Republicans in the House. In the third and final scenario, the White House would persuade Senator Grassley to agree to the House language, passing the conference report by a close margin and forcing Senate Democrats to kill or filibuster the bill. Of these scenarios, Ornstein believes the first is most likely.

?In the beginning it seemed like we would get a bill? but now a very strange process has emerged and it seems likely we will get no bill this year,? said Ornstein. He said the White House took a different legislative approach with Medicare than they did with education reform and campaign finance, and that this new approach is not likely to work. Now Members of Congress are drawing lines in the sand signaling what would be deal breakers.

Joe Antos discussed the key elements that could, by themselves, be deal breakers in a potential conference committee compromise. First among them is the premium support structure for private health plans. How the premium support formula is established could mean the difference between baby steps to competition or low participation among private plans and low enrollment in private plans by beneficiaries. Other contentious issues that could sink the bill are means testing of the premiums, how to keep employers in the game, and provider givebacks. The existence of so many moving parts decreases the chances of a final compromise. ?There seems like lots of things to trade, but really there?s not because these are basic philosophical differences,? concluded Antos.

Gail Wilensky said there is really not much difference between the Senate Tripartisan bill from last year and the current Senate bill, except this year?s has more money and the support of Senator Kennedy. She said the competition set up in the House bill is very important and should be included in the final bill, but had some suggestions for its improvement. First, she would accelerate the true competition set to begin in 2010 between Medicare and private plans. She would also set up competition everywhere, not just selected areas. Finally, she would allow beneficiaries to keep the savings from private plans and not allow it to revert back to the federal government, as the House bill would prescribe.

The panelists seemed to agree that it is not critical that a bill come out of conference committee before the August recess, but that the longer the conference goes on, the less chance there will be for a final compromise.

–Joe Moser
Galen Institute

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The American Enterprise Institute held a health policy discussion today entitled, ?Can Congress Reach Agreement on a Medicare Drug Benefit? Policy, Politics, and the Presidential Election.? Speakers included Norman Ornstein and Joe Antos of AEI and Gail Wilensky of Project Hope. Karlyn Bowman of AEI moderated the discussion.

Norm Ornstein outlined three potential outcomes of the conference committee. Under the first scenario, the conference committee faces gridlock and no bill emerges. In the second scenario, the White House and Senate Republicans would push for the Senate bill and go to moderate House Democrats for support, abandoning the more conservative Republicans in the House. In the third and final scenario, the White House would persuade Senator Grassley to agree to the House language, passing the conference report by a close margin and forcing Senate Democrats to kill or filibuster the bill. Of these scenarios, Ornstein believes the first is most likely.

?In the beginning it seemed like we would get a bill? but now a very strange process has emerged and it seems likely we will get no bill this year,? said Ornstein. He said the White House took a different legislative approach with Medicare than they did with education reform and campaign finance, and that this new approach is not likely to work. Now Members of Congress are drawing lines in the sand signaling what would be deal breakers.

Joe Antos discussed the key elements that could, by themselves, be deal breakers in a potential conference committee compromise. First among them is the premium support structure for private health plans. How the premium support formula is established could mean the difference between baby steps to competition or low participation among private plans and low enrollment in private plans by beneficiaries. Other contentious issues that could sink the bill are means testing of the premiums, how to keep employers in the game, and provider givebacks. The existence of so many moving parts decreases the chances of a final compromise. ?There seems like lots of things to trade, but really there?s not because these are basic philosophical differences,? concluded Antos.

Gail Wilensky said there is really not much difference between the Senate Tripartisan bill from last year and the current Senate bill, except this year?s has more money and the support of Senator Kennedy. She said the competition set up in the House bill is very important and should be included in the final bill, but had some suggestions for its improvement. First, she would accelerate the true competition set to begin in 2010 between Medicare and private plans. She would also set up competition everywhere, not just selected areas. Finally, she would allow beneficiaries to keep the savings from private plans and not allow it to revert back to the federal government, as the House bill would prescribe.

The panelists seemed to agree that it is not critical that a bill come out of conference committee before the August recess, but that the longer the conference goes on, the less chance there will be for a final compromise.

–Joe Moser
Galen Institute

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About the author