WASHINGTON — The new Democratic majority in the House is expected to pass a bill today that directs Medicare to negotiate lower drug prices for 23 million seniors, setting up a clash with President Bush that could help determine the direction of changes in healthcare -- whether the government plays a major role or relies on private enterprise.
The prescription drug bill repeals a Republican-approved ban on letting the government negotiate with manufacturers for lower prices. And prospects for Senate action on a similar measure improved Thursday when a key Democrat, finance committee Chairman Max Baucus of Montana, announced that he had changed his mind and could support some form of bargaining authority for Medicare.
Meanwhile, the White House said Bush would veto the House bill if it should reach his desk, saying "government interference impedes competition, limits access to life-saving drugs ... and ultimately increases costs."
The narrow debate over Medicare pricing is part of a broader battle over healthcare. Many Democrats believe government should take a strong hand in reshaping the system to expand insurance coverage and rein in costs. Bush has advocated individual action by informed consumers and employers, with government playing a supporting role -- setting ground rules and providing subsidies or tax breaks.
The Medicare drug program was intended to be a prime example of how Bush's approach could work. Private insurers negotiate with the drug industry and offer varied plans; seniors pick the one that suits them best. Democrats argue that using for-profit companies raises costs and that the government, with greater buying power, can force down prices.
As Congress continues to work on the issues, the House bill may prove to be more of a symbolic first step than an ultimate solution.
For one thing, the Congressional Budget Office has calculated that the legislation is unlikely to save money. That's because, seeking to make it more politically palatable, the bill's authors prohibited the government from establishing a list of preferred drugs for Medicare. Such lists, called formularies, are a widely used bargaining chip.
Several experts told a Senate hearing Thursday that the private insurance plans that deliver the Medicare benefit probably didn't need any help to negotiate prices for most medications. "I see nothing that warrants heavy-handed intervention in this market," Baucus said.
