Obama backs off assault on Medicare Part D

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On Monday, the Obama administration announced a rare surrender on an anti-market line of attack – this time, an attempt to warp the Medicare Part D prescription drug program into a more government-directed entity. The details of the move are here:

The Obama administration said Monday that it would scrap much of a proposed plan to limit the types of antidepressants and other drugs that seniors can get through Medicare after a backlash from lawmakers and the health industry.

In January, the Centers for Medicare and Medicaid Services proposed broad changes to the Medicare Part D prescription-drug program that covers medicines for about 39 million beneficiaries. Among the most contentious proposals was one to end the practice of covering essentially any type of antidepressant, antipsychotic or immunosuppressant prescription drug for consumers in the program. Medicare had said the plan was meant to save taxpayers money and simplify the program for seniors.

In a letter sent to congressional lawmakers Monday, Marilyn Tavenner, the Medicare agency administrator, said the drug-coverage provision and some other proposed changes to pharmacy networks and drug plans would be shelved for now. Ms. Tavenner said the agency would “engage in further stakeholder input before advancing some or all of the changes in future years.”

She added that the agency planned to proceed with other proposals in its January document related to consumer protections and antifraud provisions that have bipartisan support. The House is scheduled to vote on a bill Tuesday by Rep. Renee Ellmers (R., N.C.) that directs Medicare to stop work on the proposed rule.

At a House hearing on the proposal last month, both Republicans and Democrats urged Medicare officials to rethink the changes to the drug plan. Then, a group of 20 senators, led by Senate Finance Chairman Ron Wyden (D., Ore.) and ranking member Orrin Hatch (R., Utah), also urged Medicare to back off. In a letter to Ms. Tavenner last month, the lawmakers said they had “strong” objections to the Medicare Part D drug proposals and were concerned they would “disrupt care” and “unnecessarily interfere with a successful program.”

Here’s the letter CMS sent to Capitol Hill announcing their retreat. The politics of this issue had cut across traditional lines, with Democratic Senators concerned about how these changes would impact them politically in the midterm elections, and with K Street opposed to the measures, which would’ve had broad impacts:

The Centers for Medicare and Medicaid Services (CMS) floated a long list of changes in addition to lifting “protected status” for three types of drugs.

One provision would have limited the number of Part D drug plans that insurance companies could offer in a specific region of the country. Another would have relaxed the rules that govern plans’ preferred pharmacy networks, allowing all pharmacies to participate.

The regulations would have also permitted federal health officials to participate in negotiations between insurers and pharmacies in Part D for the first time. Each change quickly triggered its own fight among industry groups.

The administration’s surrender on this ground doesn’t end the battle over the prescription drug entitlement, which is often cited as the test-case for Paul Ryan’s premium support plan to reform the entirety of Medicare. Heartland’s site on Part D,, has more on the successes of the program.