The Dems’ Plan B for Medicare

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Democrats have walloped the Republicans mercilessly for supporting Rep. Paul Ryan’s plan to roll back Medicare. Republicans have shot back by accusing the Dems of having no ideas or plans to save the entitlement from insolvency. Now the Dems now seem determined to show the public that they can find ways to cut Medicare costs without jeopardizing the well-being of the nation’s senior citizens.

On Thursday, House Democrats introduced a new bill that would reduce payments to drug companies for covering low-income Americans who are enrolled in the Medicare Part D program, which was passed in 2006 to subsidize drugs for seniors. The new bill, sponsored by Reps. Henry Waxman (D-Calif.), John Dingell (D-Mich.), and others, promises that it will “eliminate a sweetheart deal for brand-name drug manufacturers,” according to a news release, allowing them to charge higher rates for patients enrolled in both Medicare and Medicaid. The House Dems explain why the drug prices the government pays went up—and why the GOP is responsible:

Prior to 2006, the government received substantial rebates on drugs used by “dual eligible” Medicare and Medicaid enrollees. However, beginning in 2006, the Republicans’ Medicare Part D law eliminated these rebates, dramatically raising prices for the government and profits for manufacturers. The Part D deal resulted in a substantial drug manufacturer windfall. The bill eliminates the windfall and requires that manufacturers pay the rebates for dual eligible and low-income Part D enrollees, ensuring that taxpayers and the Medicare program do not overpay for Part D drugs.  

In other words, the 2006 Medicare Part D deal gave Big Pharma a break by forcing the government to pay higher, Medicare-level payments for prescription drugs, and Democrats now want to eliminate that deal. House Dems claim their proposal would save more than $100 billion, citing an evaluation from the Congressional Budget Office. President Obama made similar noises about saving money by forcing drug companies to take the hit, proposing earlier this year that the government negotiate directly with drug companies to set prices for drugs under Medicare.

Neither proposal will be an easy sell. Drug companies were one of the few industry allies to stay on board with federal health reform—partly because they were able to fend off Democratic proposals that would slash Medicare drug payments. But Democrats are hoping that the new bill, which was also introduced in the Senate, will help cast them as both fiscally responsible and compassionate—and not just the new “Party of No.”

“Instead of making devastating cuts to programs that help low-income and middle-income Americans, as Republicans keep putting on the table, we should do what every other industrialized country does and ask the pharmaceutical industry, one of the wealthiest in the world, to chip in,” Rep. Pete Stark (D-Calif.), one of the bill’s sponsors, said in the statement.

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate