Health Care Reform: First Steps

With the major focus on health care reform in both houses of Congress and in the White House, there has been a great deal of media and individual speculation as to what progress is being made. One of the main sticking points in going forward to President Obama's proposals is the amount of money his health care reform package would require-make that, additional amount of money to the already huge annual federal government health-care bill and the nation's rising deficit.

The big players who stand to lose profits not only through a mandated public insurance plan to be offered along side private insurance plans, but health care reform in general, are the insurance companies, health facilities, physicians and pharmaceutical companies. President Obama has asked these very parties to work with lawmakers in restructuring our health care system as we now know it.

Some may have thought such a request was wasted time and energy on our president's part, but on June 20, 2009 one of the "big players"--namely the pharmaceutical industry-revealed it had come to an agreement with legislators on some changes. Max Baucus, chairman of the Senate Finance Committee has been in talks with the pharmaceutical companies for some time.

The deal the pharmaceutical industry has agreed to spend $80 billion during the next ten years to help older adults with Medicare Part D to afford their prescription medications. One way the industry will go about doing this is by paying up to almost half of the cost of those medications when Medicare beneficiaries are in their "doughnut hole" period (period of non-coverage for many prescription plans).

Lest it seem like the older adults receiving this aid from the pharmaceutical industry might lose out on using the prescription costs during that period toward their out-of-pocket total, under the proposed plan, the total cost of the drug would be used toward the out-of-pocket total. In essence, the pharmaceutical industry is giving a rebate-type of stimulus to Medicare recipients. This assistance, in some form would be available to Medicare recipients with incomes of $80-85,000/year.

Additionally, the proposal may include the pharmaceutical industry paying a higher rebate on prescription medications in the Medicaid plan.

While the rebate to Medicare recipients doesn't save any money in the health reform budget, it is a change for the positive, and private citizens on fixed incomes will realize the financial benefits. If the proposal for the pharmaceutical industry to pay higher rebates on Medicaid prescriptions is enacted, that would translate into many dollars saved in that particular program.

The agreement reached between lawmakers and the national group Pharmaceutical Researchers and Manufacturers of America (PhRMA) may be an important first step in getting the other "big players" in health care to begin honing their own solutions.

Associated Press http://www.google.com/hostednews/ap/article/ALeqM5gap9wCaolRYguYQesA2i2Yr98yLgD98UM1B80

The New York Times http://www.nytimes.com/2009/06/21/health/policy/21drug.html?ref=global-home