Confident Democrats 
Draft Broad Health Care Agenda

By Robert Pear, New York Times

October 20, 2006

Expecting to gain seats in Congress, Democrats are drafting an ambitious health care agenda to carry out their campaign promises with legislation to lower drug costs for older Americans, provide more money for children’s health insurance and expand research using embryonic stem cells.

Democrats in the House and the Senate say they want federal officials to negotiate directly with pharmaceutical companies to obtain lower prices for Medicare beneficiaries. The 2003 Medicare law explicitly prohibits such negotiations. 

Representative Nancy Pelosi of California, the House Democratic leader, said that if Democrats were in control, they would try to repeal that ban in the first 100 hours after the House convenes. 

Private insurers already negotiate drug discounts for Medicare beneficiaries, but Democrats say the government could get a better deal.

“I don’t know that we could undo all the private plans,” said Representative Pete Stark of California, who would be chairman of an important health subcommittee if Democrats were in the majority. “But at least we could offer a government-administered drug benefit. Under the existing program, we virtually guarantee the insurance companies against loss, which is a ludicrous position for us to be in.”

For 12 years, House Democrats have felt powerless to shape the health care agenda. Now they sense a major opportunity. Not only are they using health care as an issue in the midterm elections, but they also plan to use it to set the stage for the 2008 presidential campaign. 

Chris Murphy, the Democrat challenging Representative Nancy L. Johnson in Connecticut, has attacked her role in writing the 2003 Medicare law, while Mrs. Johnson takes credit for helping “millions of seniors.” 

In Ohio, the Democratic candidate for the Senate, Representative Sherrod Brown, repeatedly points out that the number of uninsured has increased by more than five million since President Bush took office.

Embryonic stem cell research has been a defining issue in Senate races in Arizona, Maryland and Minnesota.

But Republicans are not ceding those issues to Democrats. 

In a recent television commercial, Representative John E. Sweeney, a four-term Republican from upstate New York, boasts that he has “come through for every hospital in this part of New York — every one.” Senator Lincoln Chafee, Republican of Rhode Island, and Representative Deborah Pryce, Republican of Ohio, boast that they split with Mr. Bush and voted for research using embryonic stem cells.

On Capitol Hill, the Democratic agenda faces three significant constraints: Mr. Bush, fiscal reality and industry resistance. 

Any move to allow direct federal negotiation of drug prices would be opposed by the White House, most Congressional Republicans and drug companies, which stand to lose more than any other industry if Democrats take control of Congress.

Drug companies worked closely with Republicans to pass the 2003 Medicare law, and drug makers have overwhelmingly favored Republicans over Democrats in their campaign contributions.

Democrats are not naïve about their ability to write laws over White House objections. “The Democratic agenda on health care will be somewhat limited by the fact that George Bush is still president,” said Representative Henry A. Waxman of California, who has been working on health legislation for more than three decades.

After the demise of President Bill Clinton’s plan for universal coverage, Mr. Waxman said, he concluded that “the health care system can be fundamentally changed only when there’s strong public support for a specific proposal.” Democrats will use the next two years to build such support before the 2008 presidential election, he said.

Democrats do not say exactly how they would pay for their proposals, but they have said they would consider tax increases. 

A Democratic priority is to renew and expand the Children’s Health Insurance Program, created with bipartisan support in 1997. Democrats say Congress must provide more money just to preserve coverage for the four million children already enrolled. 

Federal officials say that two-thirds of uninsured children are eligible for Medicaid or the Children’s Health Insurance Program. Democrats want to help states find those children. 

The Congressional Budget Office assumes that the budget for the child health program will continue at its current level of $5 billion a year, but Democrats say that would threaten recent gains in coverage. The number of uninsured children fell to 7.9 million in 2004, from 11 million in 1998, but grew last year by 361,000. 

Democrats also vow to step up spending at the National Institutes of Health. The agency’s budget had doubled over five years, reaching $27 billion in 2003, but has risen less than 6 percent since then. 

With additional seats in the House and the Senate, Democrats say, they would overturn restrictions that Mr. Bush imposed on research involving embryonic stem cells. Congress passed such legislation this year, but Mr. Bush vetoed it.

Democrats have a long list of federal agencies, programs and industries they want to investigate. Many are eager to look into drug prices and marketing practices. They also want to investigate whether Medicare overpays managed care plans, compared with spending for similar beneficiaries in the traditional Medicare program.

Mr. Stark, the senior Democrat on the Ways and Means Subcommittee on Health, said his priority was to stop what he called “the Republican drive to privatize Medicare.”

The new drug benefit is delivered by private insurance companies, subsidized by the government. Under a bill drafted by Mr. Stark and other Democrats, Medicare would offer an additional option: one or more government-operated prescription drug plans. The government would “negotiate with pharmaceutical manufacturers with respect to the purchase price” of drugs covered by its plans.

The Congressional Budget Office says that lifting the ban on federal negotiation with drug companies “would have a negligible effect on federal spending” because federal officials could probably not negotiate prices much lower than those obtained by insurers in a highly competitive private market. 

Democrats insist that government negotiations could save large sums for Medicare. They would like to use the money to improve the drug benefit — by closing a gap in coverage, sometimes known as a doughnut hole, or by making it easier for low-income people to qualify for extra assistance.