It's heating up on Capitol Hill

According to the Federal Times, the House of Representatives passed the FY 2009 appropriations bill (HR 1150) discussed in yesterday's post by a 245-178 vote. The bill moves onto the Senate. Also in the House, according to Govexec.com, a bill was introduced to allow federal retirees to pay their FEHB plan premiums with pre-tax dollars just like employees. This bill has been introduced numerous times without success because Congress has been stymied by the difficulty of giving this benefit to federal retirees but not to private sector retirees. Of course, extending the pre-tax benefit to the whole magillah creates a whopping tax loss. But maybe that doesn't matter this year.

The health care reform effort is heating up on Capitol Hill according to CQ Politics. The President's speech left no doubt last night that there will be a push for universal health coverage in 2009. The Washington Post provides an advance report on the health care reform pieces of tomorrow's FY 2010 budget proposal. The Post reports that

If the budget is approved, drug companies would be required to increase the rebate they now provide for medications sold to Medicaid patients from 15 percent to 21 percent. The proposal would likely spark a ferocious lobbying campaign by the industry, which has argued that the current 15 percent rebate is already cutting into profits.

What the Post fails to mention is that the drug industry maintains its profitability by increasing prices on the private sector health plans whenever Medicaid takes a bigger rebate.

Also it's interesting to note that the big prescription benefit managers Medco and Express Scripts are staying afloat. Fox Business reports that

Medco Health Solutions reported fourth-quarter net income of $274.4 million, or 54 cents a share, up from $207.6 million, or 38 cents, earned in the final three months of 2007. Quarterly revenue generated by the Franklin Lakes, N.J.-based health-care provider reached $12.96 billion from the prior year's $11.38 billion. The volume of mail-order prescriptions handled by Medco hit 26.7 million in the latest quarter, up 9.4% and a company record. Medco said revenue growth primarily reflected new client wins and price inflation on brand-name drugs, offset in part by higher volumes of lower-cost generic drugs.

CNN Money reports that

Express Scripts Inc.'s (ESRX) fourth-quarter net income rose 49% as gross margins expanded on wider use of generics, which also helped push revenue slightly lower.

Express Scripts reported net income of $206.8 million, or 83 cents a share, up from $138.5 million, or 54 cents a share, a year ago. The latest quarter included a $7.3 million charge related to a security breach.

Revenue fell 0.9% to $5.51 billion.

I am personally ecstatic about UConn's win over # 10 Marquette tonight as it was Coach Jim Calhoun's 800th victory of his illustrious career.