Health Care Reform: Nelson Amendments to End Deal with Pharmaceutical Companies Voted Down

Early on in the health care debate, the Obama administration and Democrats praised a deal they had made with the pharmaceutical industry for more coverage and better cost controls for programs such as Medicare that would result in $80 billion in revenue over ten years.

Contrary to this deal, an Amendment was offered to the Senate Finance Committee bill that would have “undone the deal” but, it failed by a 13-10 vote. The entire panel’s Republicans voted against the amendment, as did three Democrats including Max Baucus, the committee chairman.

The amendment, introduced by Senator Bill Nelson (D-FL), “would have lowered the rate Medicare pays for prescription pharmaceuticals for seniors who are eligible for both Medicare and Medicaid.”

Essentially, Mr. Nelson’s bill would have created a system where the government would pay for pharmaceuticals at Medicaid rates, which are lower than Medicare rates, for those who are dual-eligible. According to the Dow Jones Newswires this amendment “would have meant an $86 billion loss over 10 years for pharmaceutical manufactures.”

Other coverage of Nelson’s amendment indicated that it would “impose billions of dollars in new costs to the pharmaceutical industry,” something that President Obama’s deal with leaders in the pharmaceutical industry promised not to do. One of the reasons why Obama and Democrats made such a deal with the pharmaceutical industry was so that they would “subsidize a big chunk of the pharmaceutical costs now borne by seniors when they hit the “donut hole,” a spending range where prescription pharmaceuticals aren’t covered by Medicare.

The New York Times also focused on Nelson’s support for Medicare Advantage, because the Finance Committee bill would cut Medicare payments to private insurance companies that provide coverage for more than 10 million Medicare beneficiaries.

As a result, Mr. Nelson’s also offered his amendment to “shield seniors from benefit cuts,” such as the $400 billion to $500 billion in both the Senate and House bills that would be taken from Medicare over 10 years to help cover the uninsured. Supporters of these cuts to Medicare say they are “eliminating overpayments to insurance companies and extending the life of the Medicare trust fund, which could run out of money in 2017.

Ultimately, seniors are now beginning to realize exactly what health care reform is doing to them: reducing their coverage and increasing their spending to help cover the uninsured. This increase in spending and decrease in coverage is a result from Congress neglecting industry by adding more cuts to pharmaceutical payments, which they promised not to do. Not only will this create obvious problems for treatment and care for seniors, but it will cause more problems for the health care system as seniors become older and do not receive the care they need. Taking money from seniors to fix health care is only one example of how complicated this mess is, and why Congress needs to spend more time figuring out reform.