W A S H I N G T O N U P D A T E
Manufacturing Industries Urge Congressional Passage of Medicare Reform
The future of health care benefits is one of the most pressing domestic issues facing the current Congress, and noted by the Aluminum Association’s board as at the top of issues facing our industry. The Medicare trust fund that covers hospital bills is forecast to be depleted in slightly more than two decades, and the program is widely viewed as antiquated because it pays for prescription medicines that patients take in the hospital but not ones they use at home.
The House's version of the legislation calls for federal benefits to Medicare recipients who buy private health insurance policies that include drug coverage. The Senate version would provide drug benefits without such subsidies. Negotiators must resolve the two bills before President Bush can sign the prescription drug proposal into law.
Proponents of the House measure, which would take full effect in 2010, say it would hold down costs by promoting a competitive health care market in which seniors could choose among several plans. But opponents say it would entice the healthiest seniors to leave Medicare, since they would qualify for lower premiums from companies that would reject less healthy applicants.
The question of premiums is not the only sticking point in the upcoming negotiations. The two chambers differ over how to establish backup coverage in areas where private insurers don't offer plans, and on whether Americans should be able to establish private medical savings accounts that would provide tax breaks for putting money aside for future health costs, among other matters.
By a one-vote margin, the House joined the Senate in late June in approving the broadest expansion of Medicare in its 38-year history, capping a decade-long quest to provide a new drug benefit demanded by elderly Americans.
At a cost of $400 billion over the next decade, both the House and Senate bills would create a government-subsidized prescription drug benefit, starting in 2006, along with a more swiftly available discount card for purchases of medicine. They would also break new ground by carving out a larger role for the private sector to deliver basic health services as well as the drug benefit to Medicare's 40 million recipients.
U.S. employers voluntarily provide prescription drugs to 12 million of the nation’s Medicare beneficiaries and generally support efforts to comprehensively reform the Medicare program to stabilize its financial condition and modernize its benefit and plan design. The association’s healthcare coalition, Employers' Coalition on Medicare (ECOM), feels the framework for the new prescription drug benefit goes a long way toward providing the flexibility needed for employers to coordinate with the Medicare program and allow them to use many of the private sector tools for innovation and quality improvement.
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