Medicare Part D: In an effort to spike a Democratic issue and protect the interests of drug and insurance companies, Republicans came up with their version of a Medicare drug prescription bill (Medicare Part D). The fix as they say was very much in. Representative Billy Tauzin (R-LA) Chairman of the Commerce Committee was listed as the principal “author” of the bill which was largely written by industry lobbyists. Shortly after its passage, Tauzin announced his retirement and swung a deal to become a lobbyist at $2.5 million/year with the Pharmaceutical Research and Manufacturers of America (PhRMA), Big Pharma’s trade group. Thomas Scully who headed Medicare at the time lied to Congress about the program’s expected costs, understating them by $139 billion ($395 billion vs $534 billion), and then threatened the program’s chief actuary Richard Foster with firing if he told Congress the truth. He too quickly returned to the private sector and a law firm Alston & Bird lobbying for the healthcare industry.
The bill came up for a vote in the House at about 3 AM on November 22, 2003. Votes are usually held open for 15 minutes. After 45 minutes, the bill was failing 215-219. Speaker of the House Dennis Hastert and House Majority Leader Tom Delay spent the next few hours engaged in arm twisting and, in the case of Nick Smith (R-MI), bribery. They were successful. The vote was closed at 5:53 AM after nearly 3 hours, and the bill passed the House 220-215. It passed 54-44 in the Senate 3 days later on November 25, was signed into law December 8, 2003, and, after a signup period, went into effect January 1, 2006.
The bill prohibited Medicare from using its market share to negotiate with drug companies for lower prices and forced enrolling seniors into private insurance plans. It presented them with multiple and confusing plans which might cover some but not other of their prescriptions. On top of this, most plans had various co-pays and deductibles further complicating the situation. And it had its famous donut-hole, which was introduced to meet the Administration’s fake cost estimates. Prescriptions would be covered up to a certain amount and then not covered until a higher threshold had been reached. Senator Dick Durbin (D-IL) described the program succinctly as “somewhere between a bureaucratic nightmare and elder abuse.”