Congress Hears Complaints About Medicare Drug Program

Feb. 8, 2006 — -- The troubled Medicare prescription drug benefit has been law for almost three years and in effect for a little more than a month, and already two congressional oversight committees have had hearings to vent their constituents' frustrations.

Today on Capitol Hill, members of the Senate Finance Committee quizzed Medicare/Medicaid Director Mark McClellan about the program. Most of the harsh questions came from Democrats, although Sen. Olympia Snowe, R-Maine, questioned the way the program was working and pushed for legislation that would allow the government to negotiate for better drug prices. The initial legislation included no such provision, an omission that at the time was seen as a boon to drug companies.

Snowe and Sen. Ron Wyden, D-Ore., have drafted bipartisan legislation that would give government the power to negotiate prices.

"I can't imagine why we'd spend $700 billion on this benefit and not allow the secretary to maximize the taxpayers' money," Snowe said.

McClellan said that the plan needs no such intervention at the hands of government bureaucrats. It should, he said, rely on competition and market forces to control costs.

He pointed out that President Bush's new budget allots $130 billion less for the benefit than originally expected. He said this is because so many insurers are involved in the program, competing for the business and keeping prices down.

Ranking minority member Sen. Max Baucus, D-Mont., pointed out that there are 40 insurers offering coverage in Montana alone, saying the program needed to be more streamlined and standardized. According to many people in the program, there are too many choices, he said. He asked for a more government-regulated "apples to apples" approach.

"If you ask people if they'd rather have a stick shift or an automatic, they'll probably tell you they'd rather have an automatic," Baucus said. "But if you ask them if they'd rather have a four-tiered formulary or a five-tiered formulary, they'll look at you in confusion."