By Jane Norman, CQ HealthBeat Associate Editor

Feb. 19, 2010 -- Conservative opponents of Democrats' health care overhaul plans touted their success in Massachusetts and vowed at a Washington political conference Friday to continue their drive to ensure the demise of a "big government takeover" of the system.

"They are not giving up, and we must not either," said Grace-Marie Turner of the Galen Institute, as she introduced a panel on "Saving Freedom from Obamacare: It Isn't Over Yet" at the annual meeting of the Conservative Political Action Conference (CPAC), a longtime event gaining new attention this year with the growth of the tea party movement. Much of the anti-overhaul action described by the panelists has come not in Washington, where Democrats control the White House and both houses of Congress, but in the states.

Heather Higgins, director of the conservative advocacy group Independent Women's Voice, said it was involved in building support for the candidacy of newly minted Republican Sen. Scott P. Brown in his surprise victory in a Massachusetts special election in January to fill the seat of the late Edward M. Kennedy. Brown gave Senate Republicans the 41st vote they needed to successfully mount filibusters.

Independent Women's Voice ran radio ads in Massachusetts on health care targeted at women and independent voters and placed thousands of recorded telephone calls featuring two physicians opposed to the overhaul, said Higgins. Polling after the election found a majority of those who heard the group's message backed Brown, she said. "Small, independent efforts actually matter," said Higgins.

Both of the physicians on the recorded phone calls "had total strangers track them down and thank them" for the calls, she said.

Eric Novack, an orthopedic surgeon and chairman of Arizonans for Healthcare Freedom, described how his advocacy group gathered hundreds of thousands of signatures and pushed to include on the Arizona ballot in 2008 a constitutional amendment that would block any state plan for universal health coverage. Known as the Freedom to Choose Act, it stated, "Because all people should have the right to make decisions about their health care, no law shall be passed that restricts a person's freedom of choice of private health care systems or private plans of any type."

While the amendment narrowly lost, voters will consider a new version in this fall's election and Novack said lawmakers in more than 30 states now are proposing similar initiatives. According to the National Conference of State Legislatures, those include proposed constitutional amendments, changes in state laws and proposals for prohibition of unfunded federal mandates. "We have made unbelievable progress — we can't let up on this," said Novack. "We can make a difference at the state level."

Hal Scherz, a pediatric urologist in Atlanta who is president of Docs 4 Patient Care, a group opposed to the "government takeover" of health care, said his physician members believe an overhaul should target lower costs, improved access and changes in malpractice laws. They'd like to see consumers able to purchase insurance over the Internet and across state lines, for example.

Scherz, who blasted the American Medical Association for its endorsements of Democratic bills, said that when he meets with the parents of his young patients, he takes two minutes at the end of the conversation and asks to talk with them about the health care overhaul. "Most of them say yes and thank me for doing this," he said.

By Jane Norman, CQ HealthBeat Associate Editor

Feb. 17, 2010 - Four House Democrats in a call with reporters used a proposed Anthem Blue Cross insurance hike in California as an example of the kind of development they hope will stoke public rage over health care costs and breathe life back into the overhaul in advance of a Feb. 25 health care summit called by the president at the White House.

What precisely Democrats will be uniting behind remains unclear, though lawmakers on the call repeatedly said 90 percent of the House and Senate bills are similar and show how to move ahead on the health care overhaul. Democratic lawmakers in the two chambers continue talking and are not far from an agreement on a united approach, they said. Rep. Chris Van Hollen, D-Md., said that "as you know, the House and Senate have come very close to reaching a final agreement in coordination with the White House."

Van Hollen, an assistant to Speaker Nancy Pelosi, D-Calif., said that the president "clearly has an idea about what legislation will be required in order for us to move forward" but wants to use the summit to get a sense of what Republicans' objectives are, and work to try to include those ideas in health care legislation.

"We are very close to ironing out the differences but the president wanted to take a moment to revisit these issues with our Republican colleagues," he said.

Van Hollen warned that the Anthem Blue Cross rate hike is "exhibit A" of what will happen if nothing is accomplished on health care. Anthem Blue Cross of California, a unit of the giant insurer WellPoint Inc., has proposed a rate hike of up to 39 percent for policies held by Californians in the individual market, prompting sharp criticism from HHS Secretary Kathleen Sebelius. "Clearly, the status quo is not working," said Van Hollen.

Rep. Rosa DeLauro, D-Conn., said House and Senate Democrats have had ongoing conversations for "a very long time" about how to proceed on the two measures. "The meeting continued, there was a working out of the areas that were different, if you will, and coming to a conclusion about it," she said. That was halted by the Jan. 19 special election in Massachusetts in which Sen. Scott P. Brown was elected and provided Senate Republicans with enough votes to mount a filibuster.

Now, President Obama has said that a Democratic draft will be laid out prior to the beginning of the bipartisan summit, using the House bill (HR 3962) and the Senate bill (HR 3590) to launch the debate.

"Since this meeting will be most productive if information is widely available before the meeting, we will post online the text of a proposed health insurance reform package," Sebelius and White House Chief of Staff Rahm Emanuel wrote congressional leaders last week. "This legislation would put a stop to insurance company abuses, extend coverage to millions of Americans, get control of skyrocketing premiums and out-of-pocket costs, and reduce the deficit."

DeLauro said that Republicans and Democrats can come together "if there is a genuineness about moving forward" on health care.

The possibility of agreement seems remote, though, given the barbs thrown by both sides in advance of the summit as they jostle for advantage.

House GOP leaders have said they're wary of Democratic "legislative trickery" and a "back room deal" that would use a complex two-bill strategy to pass overhaul legislation through Congress. Some Democratic aides have outlined an approach using the budget reconciliation process in the Senate to pass a health care bill after the House approves some fixes to the Senate bill. Only 51 votes would be needed in the Senate if reconciliation is used.

Van Hollen said he's unsure about the existence of a proposed draft Democratic package at the summit. "I don't know whether the president is going to put one particular piece of legislation on the table but he has said both the House and Senate bills provide a way forward," he said.

Rep. Xavier Becerra, D-Calif., said there are common ideas on health care among Republicans and Democrats that can be debated at the summit. "This convocation gives everyone as chance to find common ground, not necessarily to come up with one idea or one plan and put it on the table and say this is it," he said. But he also said that if disclosures such as the Anthem rate increase "are not enough to scare anyone into action, we're in real trouble."

DeLauro said the focus should shift away from discussions of how to legislate a solution. "The process is less important than the substance of what it is we are able to pass," she said.

By John Reichard, CQ HealthBeat Editor

Feb. 19, 2010 -- HHS Secretary Kathleen Sebelius Friday seized on a study showing double-digit premium increases charged by Medicare Advantage plans as a new example of punitive pricing by insurers.

"While seniors are suffering, insurance companies are doing better than ever," Sebelius said in a post on the White House health care overhaul blog.

Her comments follow a scathing Obama administration attack Thursday on big new rate hikes in the individual insurance markets. The White House is gearing up for a new effort to push through a health care overhaul, arguing that the failure to act would mean many more such rate hikes in the future.

The study referenced by Sebelius was conducted by the Washington, D.C., consulting firm Avalere Health. It found that the private health plans in Medicare that offer prescription drug coverage charge monthly premiums this year that are 14 percent higher than in 2009. Those premiums average $39.61 this year, the study found.

The rate increases varied according to the type of plan in Medicare Advantage, the private health plan side of Medicare. One type known as "private fee for service plans" has rate hikes averaging 31 percent this year. The rate hikes for HMOs in Medicare Advantage that offer drug coverage averaged 11 percent while those for local PPOs averaged 4 percent.

As a result of policies that were in place when 2010 rates were set, most plans saw their payments cut by 3 to 5 percent in 2010, the study also found.

Centers for Medicare and Medicaid Services spokesman Peter Ashkenaz said in a statement that while Medicare Advantage enrollment is rising, "these plans continue to be paid, on average, 13 percent higher" than providers in traditional Medicare. He added that "plans need to explain their premium increases to their enrollees."

Sebelius said in her blog that "Humana earned $452.3 million in the fourth quarter of 2009 from its Medicare Advantage plans, compared with $267.3 million a year earlier, a 70 percent increase. At the same time, these companies are being vastly overpaid by the federal government, making huge profits and sticking seniors with higher bills."

Separately, Sen. Dianne Feinstein, D-Calif., said Friday that she'll introduce legislation next week to establish a federal Medicare Insurance Rate Authority that would give HHS the power to prevent "unfair" rate increases in the private insurance market. HHS would have that power in states where state regulators lacked authority to reject unfair increases.

Companies would have to justify unreasonable premium increases using a process established by the HHS secretary, she said. The secretary would have the power to "deny or modify health insurance rate increases that are found to be unjustified."

Robert Zirkelbach, a spokesman for America's Health Insurance Plans, said "this is an example of what happens when Medicare Advantage payments are cut. Last year, Medicare Advantage payments were reduced and that resulted in higher premiums for seniors. Now Congress is considering more than $100 billion in additional cuts to Medicare Advantage that will result in higher premiums and reduced benefits for more than 10 million seniors in the program - breaking the promise that those who like their coverage can keep it."

CMS on Friday released a report suggesting that payment rates paid to Medicare Advantage plans in 2011 would rise 1.4 percent.

Zirkelbach issued the following statement concerning Feinstein's planned bill: "Premium increases are driven by soaring medical costs and a weak economy that is causing younger and healthier people to drop their coverage. Health plans in every state are required to provide actuarial justification for any premium increases. Creating a new duplicative layer of federal regulation would add complexity and increase costs."

By CQ Staff

Feb. 19, 2010 -- Senate Majority Leader Harry Reid on Friday issued a warning to Republicans not to obstruct Democrats' latest efforts to enact a health care overhaul, by threatening to use expedited budget reconciliation rules to force a vote on legislation that includes a public insurance option.

Reid ruled out including a public option in a Senate health bill in December, after centrists in his caucus voiced concerns that the plan would give the federal government too great of a role in a reconfigured health care system. The public plan would essentially serve as a government-run insurance option that competes against private health plans.

But on Friday, Reid's office issued a statement indicating the public plan was back on the table.

"Senator Reid has always and continues to support the public option as a way to drive down costs and create competition. That is why he included the measure in his original health care proposal," read a statement from spokesman Rodell Mollineau. "If a decision is made to use reconciliation to advance health care, Senator Reid will work with the White House, the House, and members of his caucus in an effort to craft a public option that can overcome procedural obstacles and secure enough votes."

The warning came just six days before President Obama hosts a bipartisan health care summit at the White House, and before the Obama administration is due to post a draft health bill that will serve as a starting point for discussions. That bill is not expected to include a public option.

Senate Republicans are unified in their opposition to the public option — and some Democratic centrists have also ruled out voting for any overhaul plan that contains the proposal. But by using reconciliation rules, Reid would only need 50 votes, assuming Vice President Joseph R. Biden Jr. would cast the tie-breaking vote.

It's unclear whether Reid has commitments from 50 senators to act under those circumstances.

By Jane Norman, CQ HealthBeat Associate Editor


Feb. 19, 2010 -- President Obama speaking in Nevada Friday invited Republican leaders to "show me what you got" at a health care summit with congressional leaders set for Thursday. The administration's own overhaul proposal based on Democratic measures already approved in the House and Senate is expected to be posted online by the White House at least 72 hours prior to the bipartisan meeting.

"The Republicans say that they've got a better way of doing it," Obama told the crowd at a town hall meeting at Green Valley High School in Henderson, where he was accompanied by Senate Majority Leader Harry Reid, D-Nev. "So I want them to put it on the table, because. . . as I told them a while back. . .I'm not an unreasonable guy. If you show me that you can do the things we just talked about, protect people from insurance problems, make sure that the costs are controlled, and people who don't have health insurance are covered, and you can do it cheaper than me, then why wouldn't I do that?"

The summit will come more than a month after the election of Republican Scott P. Brown to the Senate seat in Massachusetts left open by the death of Sen. Edward M. Kennedy. That gave the GOP enough votes to successfully mount filibusters in the Senate and stalled the health care overhaul.

Democrats in Congress shifted their public focus to jobs while talks continued behind the scenes on a new strategy, including the possible use of budget reconciliation in the Senate to push through a health care bill with 51 votes, incorporating changes agreed to by the House.

Democrats say they are close to a deal that would meld the House and Senate bills (HR 3962, HR 3590) but want to give Republicans a chance to have their say at the summit before moving forward. But the prospects of agreement seem remote given that both sides have also continued bashing each other, with Democrats attacking Republicans for a lack of a comprehensive approach and Republicans warning of a "government takeover" of health care.

Obama pinpointed a 39 percent proposed increase by Anthem Blue Cross of California for consumers in the individual market in that state, the same increase that's been repeatedly highlighted in recent days by Health and Human Services Secretary Kathleen Sebelius and congressional Democrats. "That's the future," he told the crowd. "That's going to be one of the main things that helps to bankrupt local school districts, because all these teachers, all these employees, those health care costs go up."

Obama said that advisers warned him not to take on a health care overhaul because it's so complex, and he acknowledged a drop in public approval ratings not just for him but for Reid.

"Health care has been knocking me around pretty good," he said. "It's been knocking Harry around pretty good. And Harry has shown extraordinary courage because he said, you know what, Barack, we are going to get this done. I know it's costing me politically but it's important, it's the right thing to do. That's what he's been saying consistently, and I'm proud of him for it."

While a schedule has not been released yet for the summit, Obama's remarks indicated it could be lengthy. "You may not want to watch all six or eight hours of it, you got things to do," he said. "But pay attention to what this debate is about, because there's been so much talk about death panels and adding to the deficit, and this and that and the other."

The overhaul has "nothing to do with a government takeover of a health care," he said. "Most of you would have the exact same health care that you've got right now, but you'd be more protected and more secure. And if you don't have health care, you'd have a chance of getting health care."

By Alex Wayne, CQ Staff

Feb. 18, 2010 -- At least 30 states are contemplating cutbacks to Medicaid, the health entitlement for the poor, beginning in July, unless Congress acts to keep extra money flowing into the program, the health consumer interest group Families USA said Thursday.

The 2009 stimulus law (PL 111-5) included $87 billion to increase the federal government's share of Medicaid spending and help states struggling with budget deficits. But the money runs out Dec. 31, and Congress has not given a clear indication of whether it will be extended.

Fiscal 2011 begins on July 1 for many states, rather than Oct. 1, the start of the federal fiscal year. Unlike the federal government, states must balance their budgets. If they can't count on the extra federal Medicaid money throughout their next fiscal year, states will make cuts to live without it, Families USA executive director Ron Pollack said in a conference call with reporters.

"If they don't believe this extension is likely, it is clearly likely we are going to see cutbacks in the Medicaid program," Pollack said. His group released a report Thursday detailing the budget woes facing states in 2011 and the legislative measures they are contemplating to reduce Medicaid's draw on their accounts. In most states, Medicaid is either the largest or the second-largest expenditure, even though the federal government is now picking up almost two-thirds of the cost of the program thanks to the stimulus spending.

Pollack's warning came the same day that the Kaiser Family Foundation's Commission on Medicaid and the Uninsured reported that nearly 3.3 million more people were enrolled in state Medicaid programs in June 2009 compared to the previous June, the biggest single-year increase ever. The jump, driven by job losses during the deep recession, pushed Medicaid enrollment to 46.9 million people, the study found.

"State Medicaid programs have been able to help millions of Americans who have nowhere else to turn in a recession," said Diane Rowland, executive vice president of the foundation and the commission. "But the states obviously face significant fiscal pressures as increases in enrollment push up costs at a time when state budgets are already severely constrained."

States are allowed wide latitude to set eligibility, payment rates and other variables within Medicaid in order to control spending. But under the stimulus law, states accepting the extra money were barred from reducing eligibility, in order to avoid adding thousands of low-income people to the ranks of the uninsured during the recession. That "maintenance of effort" requirement will expire when the extra money runs out at the end of December.

Pollack said that the cutbacks under consideration, in legislatures ranging from Arizona to Florida to Vermont, could result in perhaps a million or more people losing health insurance coverage, including children and pregnant women in some states.

Funding Extension
President Obama included $25.5 billion in his fiscal 2011 budget to extend the stimulus funding through June 2011, the end of states' fiscal years. The House included an extension of the extra Medicaid funding in a bill aimed at job creation that it passed in December (HR 2847). The Senate has not acted on the issue, and has given little indication of when or if it will. But lawmakers are under tremendous pressure from governors and advocacy groups such as Pollack's to resolve the situation.

Senate Majority Leader Harry Reid, D-Nev., excluded an extension of the Medicaid funding from a jobs-related proposal the Senate will take up next week as an amendment to the House jobs bill. But should the Senate pass its version of the legislation, the Medicaid provision could be added to the bill in a conference committee with the House. Or the Medicaid money could be included in a second jobs bill the Senate is expected to take up later this year.

"I think there is a reasonable chance that we could see an extension of the federal matching dollars," Pollack said.

Sen. John D. Rockefeller IV, D-W.Va., chairman of the Finance Committee's Health Subcommittee, has cosponsored legislation with Reid to keep the extra Medicaid funds flowing. "There is no question that we need to extend Medicaid relief — states need this help and we must move this process forward now," he said in a statement Thursday.

"State and local governments accounted for a loss of 41,000 jobs from December to January. If Congress does not act swiftly to extend state fiscal relief in a timely manner, it could cost the economy up to 900,000 jobs — this is unacceptable and preventable with swift action."

A spokeswoman for Reid, Regan LaChapelle, placed the onus for passing an extension of the extra Medicaid money on Republicans, who have enough votes to filibuster legislation in the Senate. "It is our hope that Republicans will step up and put the needs of their states and constituents above politics," she said.

Moderate Republicans, such as Maine's two senators, Olympia J. Snowe and Susan Collins, would be likely to support the Medicaid extension by itself, as would other Republicans from states facing serious budget problems. But they could oppose the measure if it is combined with more controversial proposals.