Health care reform update

The Federal Times reports today that

Sixteen federal unions and employee groups signed [a] Jan. 12 [,2009,] letter saying the FEHBP's insurance options are in no way excessive and do not deserve to be taxed. [See the November 25, 2009, AFHO white paper on these taxes for more details.] The letter was sent to Senate and House Democratic leaders, committee chairmen involved in health care and members of the National Capital Area delegation. * * *

The organizations also asked to be allowed to review and comment on the final agreement between the House and Senate on the role the Office of Personnel Management will play in health care. * * *

The House-passed health care bill would extend coverage for dependent children up to age 27. [The Senate bill provides for an extension to age 26.] The unions want clarification in the final bill that the extension of benefits applies to FEHBP plans.

Groups signing the letter include the American Federation of Government Employees, Federal Managers Association, National Active and Retired Federal Employees Association, and National Treasury Employees Union.

A copy of the letter is available here. The Wall Street Journal is reporting that

House and Senate negotiators are considering applying for the first time the Medicare payroll tax to investment income as part of a compromise to pay for a health overhaul.

The extra Medicare tax would apply only to the wealthy and could allow congressional Democrats to reduce the sting of a tax on high-cost insurance plans, said Democratic aides and others briefed on the negotiations.

Govexec.com reports that

House Democratic lawmakers return to town on Tuesday [today] after nearly a month in their districts to talk about health care this evening and give leaders an idea of where to focus as they continue negotiations with the Senate.

Leaders will meet Tuesday afternoon as well and have laid out a handful of priorities. But the order of importance and just how hard they will push for some provisions in their bill is expected to become clearer after Tuesday's meetings, a senior leadership aide said.

The caucus will serve to further reassure members the House will not rubber-stamp a Senate-passed version of the healthcare overhaul bill.

The Government Accountability Office released a report today on rising prescription drug costs.

From 2000 to 2008, 416 brand-name drug products--different drug strengths and dosage forms of the same drug brands--had extraordinary price increases. These 416 brand-name drug products represented 321 different drug brands. The number of brand-name drug products that had these extraordinary price increases represents half of 1 percent of all brand-name drug products.

More than half of the brand-name drug products that had extraordinary price increases were in just three therapeutic classes—central nervous system, anti-infective, and cardiovascular.

Based on interviews with experts and industry representatives, a lack of therapeutically equivalent drugs—both generics and other brand-name drugs used to treat the same condition—and limited competition may contribute to extraordinary price increases.

Reuters reports that

Democratic senators Charles Schumer and Amy Klobuchar requested the GAO analysis and said it shows more must be done to make medicines affordable, including allowing the federal government to negotiate prices.

"This is further proof that Medicare should be allowed to negotiate drug prices, just as the Veterans Administration does. It would help save taxpayers a lot of money," Klobuchar said.

PhRMA, the prescription drug manufacturers trade association, replies that

Unfortunately, the GAO report focuses only on a small number of selected brand medicines rather than the entire prescription drug market. When looking at recently released national health care spending data for 2008, there was a sharp decline in retail prescription drug spending growth, leaving medicines as one of the slower growing areas of health care expenditures.

“In fact, according to CMS, the 3.2 percent growth in prescription drug spending is the lowest growth rate in 47 years and well below the overall growth rate for health care.