Feingold Bills Will Save Taxpayers and Medicare Billions

Feingold Bills Will Save Taxpayers and Medicare Billions

Work Needs to Continue to Fix the Problems Caused by the Flawed Medicare Prescription Drug Bill that Passed in 2003

U.S. Senator Russ Feingold (D-WI) this week introduced two bills that will save taxpayers and the Medicare program billions of dollars. The first bill, S.124, eliminates $10 billion of the "slush fund" for HMOs and PPOs included in the Medicare prescription drug bill that passed in late 2003. Under the new law, the Secretary of Health and Human Services has the power to dip into the multi-billion dollar fund and send money to HMOs and PPOs that wish to expand their operations, or that are having trouble staying in business, amounting to handouts to the big insurance companies at the Secretary's discretion. Feingold's other bill, S.123, the Efficiency in Government Health Care Spending Act, would allow Medicare to negotiate lower drug costs for seniors in Medicare. The new prescription drug law includes provisions that effectively prevent the government from negotiating lower prescription drug costs with the drug companies. If the government could negotiate drug prices, lower costs would save seniors and taxpayers millions.

"We cannot and should not continue to ask taxpayers to subsidize HMOs and PPOs. The multi-billion dollar fund established under the Medicare program is available only for the care and well-being of the HMOs and does nothing for people who actually rely on Medicare," Feingold said.

The new Medicare program allows private insurance companies to negotiate prescription drug prices with pharmaceutical companies, without allowing Medicare to be involved. Because of this, the private insurance companies that negotiate are able to take advantage of any rebates and cost savings offered by the drug companies. Meanwhile, Medicare beneficiaries have to swallow whatever prices these pharmaceutical companies choose.

"We should not be giving away billions to drug companies, HMOs and PPOs at the expense of the American taxpayer, our seniors, and others in need," Feingold said.

http://feingold.senate.gov/~feingold/releases/05/01/2005127B07.html