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Update
When NOW first reported on the Medicare reform legislation at the end of April of 2004, the first phase of the new drug benefit was about to go into effect. That didn't mark the end for Medicare as a hot campaign issue. A recent national Kaiser Family Foundation/Harvard School of Public Health survey found that nearly twice as many Medicare recipients had an unfavorable view of the new law as had a favorable one. The survey also found that "the views of people on Medicare about the new law favor Democrats more than Republicans in the 2004 elections."
A September 2004 Government Accountability Office (GAO) report found that a research demonstration project often cited in support of PPO costs compared to those of Medicare was run under faulty premises, leaving the question of fiscal benefits still open. The GAO found that PPOs "were paid $652 to $750 more per enrollee annually than it cost to deliver the same care through publicly run Medicare."
Since NOW first reported on Medicare, there have also been a number of new insights into how the Medicare Reform legislation made it through Congress. First, there is the matter of the cost estimates presented to Congress before and after the passage of the legislation. Two months after the legislation was signed, the White House said the law would cost much more than the original figure — $534 billion over 10 years, rather than $400 billion. Criticism from both sides of the aisle came from those who said they wouldn't have voted for the legislation if they had known the higher estimates.
A recent investigation by both the Health and Human Services Inspector General and the Government Accountability Office found that the Bush administration "illegally withheld data from Congress on the cost of the new Medicare law." In September of 2004, the GAO ruled that the former head of the Medicare agency, Thomas A. Scully, had threatened to fire the chief Medicare actuary Richard S. Foster if he revealed the higher estimates to Congress before the crucial vote. The GAO has suggested that, as a penalty for this violation of federal appropriations law, Mr Scully should repay seven months of his salary to the government.
In June 2004, watchdog group Public Citizen released a report which documented the intense lobbying effort by the pharmaceutical industry, HMOs and others to encourage passage of the bill. Through study of public documents, Public Citizen found that interest groups had spent $141 million on Washington lobbying in 2003 and employed at least 952 lobbyists during that period.
Finally, there is the public admonition of House Majority Leader Tom DeLay. The House Ethics Committee formally chastized DeLay on September 30 for "improperly trying to persuade Michigan Republican Representative Nick Smith to change his vote on prescription drug legislation." Smith had charged in a personal column and in interviews that Republican leaders offered him "bribes" in the form of campaign help for his son, who was running to replace him.
Smith later said that there was no specific mention of money and that the arm-twisting did not meet the legal definition of bribery. As a result, he was also admonished by the committee for "speculation and exaggeration" and for "making public statements that risked impugning the reputation of the House."
- Investigation Into Certain Allegations Related to Voting on the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, House Committee on Standards of Official Conduct, September 30, 2004, (PDF)
- GAO Report on Chief Actuary's Communication with Congress, September 7, 2004
- The Medicare Drug War:
Drug Companies and HMOs Led an Army of
Nearly 1,000 Lobbyists to Promote Misguided
Legislation and Increase Profits, Public Citizen
- Medicare Demonstration PPOS, GAO Report, September 2004
- Kaiser Family Foundation, Prescription Drug Benefit
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