Medicare Part D (Medicare prescription drug benefit)

As part of the Medicare Modernization Act of 2003, the US federal government created the Medicare Part D (Medicare prescription drug benefit) program for Medicare participants, primarily seniors. The program's goal was to offer seniors a discount for prescription medication payments and prescription drug insurance premiums in the form of private, stand-alone drug plans. It went into effect on January 1, 2006. As a result, taxpayers are stuck with a confusing and inconvenient system that has a variety of user constraints and is run by commercial insurance providers who provide Medicare-approved prescription benefit plans (PDPs) as well as Medicare Advantage managed care plans that contain a Part D drug benefit (MA-PDs) as well as the most expensive prescript drugs in a world (FA).

The political process of Medicare Part D legislation become one of the most controversial since 90-s (Slaughter) as well as the success of its implementation and a law what country got in the result (Phuong). In this paper, I will make an analysis of legislation process for that program and reasons for such imperfect document to pass. First, I should notice main reason of final document incompetence and miss of its original goals, that is a conflict of stockholder groups' interests, strong profit motives of some participants and specific political agenda of that period (FA). While main beneficiaries of the program supposed to become seniors and disabled people, in reality, it becomes insurance companies and American drug producers. I will discuss interest groups involved in the process in more details.

Two main groups of stakeholders for the Medicare Part D are elderly and disabled people (senior patients whose costs the plan covers) and private health plans providers (health insurance companies and American drug producers). Under the initiative, private plans get right to modify the benefit design, while in law outlined just a standard one. Preferences what private plans get were: the ability to set their premiums, design formularies, use cost management tools (prior authorization, step therapy, or quantity limits).

Stakeholders groups positions in relation to Plan D have different severity, while private health plans/ providers are supportive, elderly/ disabled (patients) are neutral to the initiative. As well, these groups have different levels of influence – first strong one, when second just average (HPM). Interests of that groups been represented by opposition political parties and some other governmental entities.

Around governmental entities influenced the process of policymaking and legislation I can list Bush Administration and Republicans, Democrats, Advocacy groups and US Senate (HPM). First entity has been supportive of the program, second one – criticizing legislation; the influence of both sides is very strong (HPM). For Bush Administration and Republicans that document have had a special role and importance, as it been developed in a short time before presidential elections, where the party would save its political power and president to be re-elected. The program has been populist in its core, addressed to a great number of American seniors and by pretending that it provides high benefits to a vulnerable and needy category of people without producing extra budget deficit to all taxpayers supposed to get many pro-Republican votes (FA).

Let us consider policy process stage by stage with special attention to strategies and tools applied by groups and entities to influence the outcome of legislation. In addition, key figures and scandals related to them due to a number of violations will be marked. On the stage of draft production (2003 year) both Republicans and Democrats been suggesting amendments (59 in total), but the party having political power at that moment (Republicans) used it to reject most of them. Around amendments that have not come to Congress for debates been ones about the usage of beneficiaries' collective purchasing power to negotiate lower prices and the right to import cheaper drugs from Canada to USA (Slaughter). Both would make the position of patients better and been supported by Democrats.

On the next stage, the conference process, senior Republicans used their political power to keep the process in secret for opposite party. Republicans have been able to select participants of deliberations physically presented in the conference room, that way pharmaceutical industry came inside and Democrats did not (Slaughter).

The other source drug producers have had to affect the law project been actual and potential lobbyists around primary authors, such as the chair of the Commerce Committee, Representative Billy Tauzin (R-La.), who become next to program passing a legislation a president of the Pharmaceutical Research and Manufacturers of America (Slaughter). He and some of his colleagues soon change the main job from administrative to lobbying for Pharmaceutical Research and Manufacturers of America (PhRMA) with a significant rise in salaries. That way is not surprising that a number of people in a process have had the interest to make a favor to their next employers. Around other key figures from pharmaceutical lobby there is Thomas Scully, who been pursuing a job as a lobbyist standing on administrative position in a head of Medicare program (and got it 10 days after Plan D legislation and signification by Bush), in addition to that assignment Scully already been hospital industry lobbyist (FA).

People with conflict of interest been participating in writing the initial bill, the legislation, estimation of project costs. Through lobbying to project text been added patent protection against generic drug makers (Slaughter).

The case of Thomas Scully requires special attention. One of the key vulnerabilities of the program been its real cost, what been estimated by Medicare’s chief actuary, Richard Foster, as $535 billion. At the same time, the limit for projected cost placed by congressional budget resolution been just $400 billion and showing real figures publicly could make the initiative dead by one point of order in the House or Senate (FA). For those conditions to protect Plan D a Republican appointee at the Department of Health and Human Services Thomas Scully, first, underestimated figures and presented to Congress estimated cost for ten year of $395 billion, second, he been ready to make an abuse of power to fire Richard Foster for sharing true estimates (FA).

On the stage of voting for conference report been used a number of violations of House rules, Republicans manipulated time in a favorable for their party manner. First, reduced time for reading bill project (850 pages) to one day then prolonged time for legislation voting until Republicans got the narrow lead. The other unethical tactic used by Republicans to win in legislation voting been bribing, however in this case proper punishment been appliedguilties.

In a day of voting altogether, it worked the next way: at 3 a.m. when the vote was called despite the fact that the Republican Party has a majority in the House of Representatives, the votes being 216 against 218 and the project is failing if it is closed in a regular 15 minutes period. Next Republicans turned off the C-SPAN cameras for the three hours and been applying pressure on congressional representatives to change their votes both in Republican and Democrats camps. The key figure in this episode is House Majority Leader Tom DeLay, who used very strong political arguments in bribing fellow Republican Nick Smith. His argument has been a promise to ensure house seat for Smith's son in a case he will change his opinion to a positive one for Plan D. To other negative voters been applied tactics taking less attention by the House Ethics Committee but still of “strong arm” type. In a result 216:218 become 215:220, so the bill passed (FA).

In total, in the process of preparation and legislation of Part D by Republicans and private health plans/ providers been used a number of malpractices: manipulations with information, time, access and right of vote, bribing, lobbying with conflict of interest. As result final version of the document seriously unfavorable for other sites: patients (seniors and disabled), pharmacists, nursing homes, and families, as well as for states and taxpayers.

Conclusion

The case of Medicare Plan D legislation and related political process full of rules violation is surprising for me and absolutely does not corresponds with my understanding of correct policy and politics. However is easy to understand interests and powers inflating and forming the situation that is improper for the political system of such state as the USA, declaring high standards of democracy and political culture.



References

Huynh, P. T., Guterman, S., & The Commonwealth Fund. (2006). US Medicare Prescription Drug Coverage. Retrieved on July 31, 2017, from http://hpm.org/en/Surveys/CMWF_New_York_-_USA/07/US_Medicare_Prescription_Drug_Coverage.html

Slaughter, L.M. (2006). Medicare Part D — The Product of a Broken Process. Retrieved on July 31, 2017, from http://www.nejm.org/doi/full/10.1056/NEJMp068116#t=article

Votour, G.M. (2015). Medicare Part D Policy: The Cost to the Republican Party. Retrieved on July 31, 2017, from https://fierceadvocacy.wordpress.com/2015/04/27/medicare-part-d-policy-the-cost-to-the-republican-party-2/