AFSCME LEGISLATIVE REPORT April 13, 2007

[Omaha Steve]

Below are the top stories of the week from Capitol Hill.

AFSCME LEGISLATIVE REPORT
April 13, 2007

In this issue:

* Senate Acts to Allow the Government to Negotiate Lower Drug Prices for Medicare
* Senate Finance Committee Takes Long Overdue Look at Medicare Private Plans
* Congress Urged to Strengthen Equal Pay Law
* Support Grows to Prohibit Internal Revenue Service (IRS) >From Contracting Out Tax Collection

Senate Acts to Allow the Government to Negotiate Lower Drug Prices for Medicare
Late Thursday, the Senate Finance Committee approved legislation (S. 3) that would permit the federal government to negotiate with pharmaceutical companies over the price of drugs paid for by Medicare Part D, the prescription drug program. Current law now prohibits the government from negotiating lower prices on drugs used by Medicare beneficiaries. Debate on the bill in the full Senate is scheduled to begin Monday. However, because of a veto threat by President Bush and opposition from Senate GOP leaders, there is a strong possibility that the Republican leadership will filibuster the bill, requiring proponents of the legislation to obtain 60 votes for passage, rather than a simple majority.

AFSCME has long advocated a change in the law to require the federal government to bargain over drug prices under the Medicare program, just as the Veterans Administration now bargains over the price of prescriptions for veterans. A stronger measure approved by the House earlier this year does require such negotiations. While the Senate bill only allows, rather than requires, negotiations, approval of the Senate bill is a step in the right direction. If S. 3 is approved by the Senate, a conference of House and Senate leaders would then negotiate a final compromise bill. Those negotiations offer the opportunity to ultimately produce a compromise that is stronger than the Senate bill.
(Barbara Coufal- [e-mail])

Senate Finance Committee Takes Long Overdue Look at Medicare Private Plans
On Wednesday, the Senate Finance Committee held a hearing to evaluate how well Medicare private plans are serving beneficiaries and whether they are effective and efficient alternatives to regular Medicare coverage. This review of the so-called Medicare Advantage program is long overdue, and it highlighted how the private plans are receiving excessive payments in order to increase profitability for the insurers at the financial expense of the overall Medicare program.

In 2003, President Bush and GOP leaders pushed to expand private plans in order to shift more Medicare beneficiaries out of traditional Medicare and into private health maintenance organizations (HMOs) and other managed care plans. These private plans began to receive extra payments that average 12 percent higher than what traditional fee-for-service Medicare coverage costs. Some payments exceed Medicare average costs by 19 percent. These overpayments are not only a sweetheart deal for the private insurers, but they put a financial strain on the federal budget at a time when the country is seeking to cover uninsured low-income children and meet other pressing domestic needs.
(Barbara Coufal- [e-mail])

Congress Urged to Strengthen Equal Pay Law
On Thursday, April 12, the Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing on two pending bills - the Fair Pay Act of 2007 (S. 1087), introduced by Sen. Tom Harkin (D-IA) and the Paycheck Fairness Act (S. 766), introduced by Sen. Hillary Clinton (D-NY). More than 40 years after the passage of the Equal Pay Act, a persistent gap between women's and men's wages remains. Advocates of the legislation told lawmakers that changes in federal law were necessary to combat this gap, including strengthening penalties for violations by employers. The House will also take up the issue with a hearing on April 24, Equal Pay Day.
(Karen Swift-Wick- [e-mail])

Support Grows to Prohibit Internal Revenue Service (IRS) From Contracting Out Tax Collection
Bi-partisan support is growing in the House and the Senate in support of legislation to prohibit the IRS from contracting out tax collections to private tax companies. Recently, House Ways and Means Committee Chair Charles Rangel (D-NY) sent IRS Commissioner Mark Everson a letter, which stated Rangel's "intent to have legislation enacted this year to repeal or significantly modify" the current authority and stated, "I strongly urge that you not proceed with the process of awarding new private tax collection contracts this year." In the House, a bipartisan group of 100 representatives cosponsored the "Taxpayer Abuse and Harassment Prevention Act of 2007" (H.R. 695); the Senate's version (S. 335) has 18 cosponsors. Recently, AFSCME joined Citizens for Tax Justice, OMB Watch, and the National Treasury Employees Union to write support letters to the House and Senate.
(Marc Granowitter- [e-mail])

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