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Furious Conservatives Forget Bush Ordered Insurers to Pay for Medicare Prescriptions

December 14, 2013

With the deadlines looming for Americans to enroll in health insurance plans for 2014, conservatives are shocked--shocked!--that the Obama administration is "strongly urging" insurance companies to start coverage on January 1 even in advance of receiving new subscribers' premium payments. For the Wall Street Journal and Forbes' Avik Roy, these and other HHS contingency measures designed to help consumers manage the transition to new policies during the rocky rollout of the health insurance exchanges mean "backdating Obamacare," a "government takeover" which treats carriers like "battered wives."
But the frothing at the mouth conservatives would be advised to swallow their bile. After all, when the disastrous launch of the new Medicare Part D prescription drug program left over six million seniors without their drug coverage in January 2006, President Bush ordered America's insurance companies to pay for their prescriptions while the fiasco was straightened out. And as it turned, dozens of states--most of them led by Democratic governors--had to step in cover billions more in drug costs until the Bush HHS could fix the system that left patients, pharmacists and physicians alike frustrated and confused.
As the New York Times reported on January 16, 2006 ("President Tells Insurers to Aid Ailing Medicare Drug Plan"):

With tens of thousands of people unable to get medicines promised by Medicare, the Bush administration has told insurers that they must provide a 30-day supply of any drug that a beneficiary was previously taking, and it said that poor people must not be charged more than $5 for a covered drug.
The actions came after several states declared public health emergencies, and many states announced that they would step in to pay for prescriptions that should have been covered by the federal Medicare program.
Republicans have joined Democrats in asserting that the federal government botched the beginning of the prescription drug program, which started on Jan. 1. People who had signed up for coverage found that they were not on the government's list of subscribers. Insurers said they had no way to identify poor people entitled to extra help with their drug costs. Pharmacists spent hours on the telephone trying to reach insurance companies that administer the drug benefit under contract to Medicare.
Many of the problems involve low-income people entitled to both Medicare and Medicaid.
In a directive sent to all Medicare drug plans over the weekend, the Bush administration said they "must take immediate steps" to ensure that low-income beneficiaries were not charged more than $2 for a generic drug and $5 for a brand-name drug.
In addition, it said insurers must cover a 30-day emergency supply of drugs that beneficiaries were taking prior to the start of the new program.
In an interview yesterday, Dr. Mark B. McClellan, administrator of the federal Centers for Medicare and Medicaid Services, said that "several hundred thousand beneficiaries who switched plans" in December may have had difficulty filling prescriptions in the last two weeks.

The Bush administration's desperation and insistence, as Roy would put it, that "insurers to cover up for its mistakes" was understandable. As the Washington Post reported on January 14, 2006, "Two weeks into the new Medicare prescription drug program, many of the nation's sickest and poorest elderly and disabled people are being turned away or overcharged at pharmacies, prompting more than a dozen states to declare health emergencies and pay for their life-saving medicines." Roughly 6.4 million seniors who just days earlier had gotten their prescriptions for free faced the prospect of going without because of untrained pharmacists and computer glitches. Two days later, the New York Times reported, many states (most of them led by Democrats) came to their rescue:

About 20 states, including California, Illinois, Ohio, Pennsylvania and all of New England, have announced that they will help low-income people by paying drug claims that should have been paid by the federal Medicare program.

Among the governors taking action were future Obamacare foes Tim Pawlenty and Mike Huckabee, who declared a health emergency in his state of Arkansas. Joining them was Texas Governor Rick Perry, who on January 26 ordered the Lone Star State's Health and Human Services Commission to resume state Medicaid coverage for residents who were switched to the Medicare plan and are having problems with the new system.
But as we fast forward to December 2013, the reliable water carriers of the Republican Party are outraged that the Centers for Medicare and Medicaid Services under Democrat Barack Obama are following the same course. As Avik Roy put it:

The administration could pay insurers to cover up for its mistakes. But that would lead to criticism--as it has in other instances--that the White House is lawlessly throwing taxpayer money at insurers to, well, cover up for its mistakes. So, instead, they're asking insurers to pay for the mistakes.

For their part, the insurers seem largely unfazed by the Obama administration's request. As the Washington Post's Sarah Kliff reported:

One insurance official, who asked for anonymity to discuss the proposal frankly, said the changes did look generally feasible at first glance.

They should be feasible for the insurers. After all, they did the same thing for President Bush.


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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