Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



June 1, 2010

Washington Health Policy Week in Review Archive 8e0d5e80-5619-4448-9fa7-d371f277799f

Newsletter Article


House Sends Tax and Benefits Bill to Senate

By Richard Rubin, CQ Staff

May 28, 2010 -- Despite defections from some conservative and freshman Democrats, the House endorsed a $113 billion package of tax breaks and social spending programs Friday, concluding a week of frenzied activity that saw the measure shrink dramatically.

The Senate had already left Washington for the Memorial Day recess, which means that expanded unemployment benefits will expire during the recess, along with a number of other programs and provisions.

The House first voted 215-204 for the bulk of the tax and benefit extensions. Then it voted 245-171 to shield doctors from a 21 percent Medicare payment cut that is due to take effect June 1, granting them a 2.2 percent increase for the rest of this year and an additional 1 percent boost next year.

Democratic leaders had struggled to cobble together a package that would attract enough votes to pass, seeking to alleviate a range of concerns among their members.
Many lawmakers were loath to vote for spending that would add to the record federal budget deficit, especially when they lacked evidence that the Senate could muster the 60 votes needed to clear the bill.

The final version would still add $54.2 billion to the deficit, according to the Congressional Budget Office, and it is likely to be amended in the Senate in June.

The last extension of the unemployment benefits, "doc fix" and other provisions — such as the national flood insurance program — will expire while Congress is out of town. The tax breaks covered by the legislation, such as the business research and development credit and the deduction of state and local sales taxes for individual taxpayers, expired at the end of 2009.

Efforts to reach agreement on a package that could clear both chambers fell apart. The Senate is expected to pick up the House measure after it returns June 7 and may make more changes to it.

Although Congress eventually may extend most of the expiring provisions retroactively, it is likely to take several weeks to do so — with a loss of jobless benefits for some individuals and disruptions to a number of agencies and programs in the meantime.

House Democrats scaled back their ambitions repeatedly over the past week, after moderate Blue Dogs and a number of Democratic senators complained about earlier versions that would have added more than $100 billion, and then more than $80 billion, to the deficit.

To help reduce the bill's deficit number to $54.2 billion, lawmakers shortened the extension of unemployment benefits, through Nov. 30 instead of Dec. 31. They also continued the Medicare payments to doctors for 19 months instead of 3.5 years. And they jettisoned entirely the earlier version's extensions of Medicaid assistance to the states and expanded COBRA health insurance subsidies for jobless workers.

That means the extra federal Medicaid funding provided to states under the 2009 stimulus law (will lapse at the end of this year. The expanded COBRA subsidies expire at the end of this month.

In response to the April 20 offshore oil rig explosion and subsequent massive leak in the Gulf of Mexico, the final bill would increase the excise tax that funds the Oil Spill Liability Fund to 34 cents per barrel, rather than 32 cents as initially proposed. The current tax is 8 cents per barrel.

The leadership also altered the bill's extension of the "above-the-line" tax deduction for qualified education expenses, reducing its cost to $693 million over 10 years, compared with $1.5 billion in the earlier version.

The new version retains other provisions of the earlier legislation, such as a summer jobs initiative, Build America Bonds assistance for state and local governments, and money for legal settlements of long-running class action lawsuits brought by Native Americans and black farmers.

The Justice Department, which negotiated the $3.4 billion settlement in Cobell v. Salazar, the suit involving alleged government mismanagement of Indian assets, said that in light of the House vote, "the parties have agreed to extend the May 28, 2010, legislative enactment deadline for congressional enactment to June 15, 2010."

John Boyd, founder and president of National Black Farmers Association, said, "Today was a good step by Speaker Pelosi and the House. We have one chamber behind us and one more to go. I think it's going to be a much closer vote in the Senate."

Offsets for Tax Breaks

The bill is partially offset under pay-as-you-go principles, but the "doc fix" and extension of unemployment benefits would add to the deficit.

CBO reported total outlays of $102 billion. But the true cost of the package appeared to be closer to $113 billion, when all of the revenue-raising offsets in the bill are added to the emergency and exempt spending that would increase the deficit.

The offsets include a change in the tax treatment of the "carried interest" earned by real estate investors, venture capitalists and private equity managers. Changes incorporated with an amendment to the rule on Friday would delay the effective date to Dec. 31 from the date of enactment, but the tax change still is controversial in the Senate.

The bill would place new limits on companies' ability to use foreign tax credits, because Democrats say that current tax law provides an incentive to move jobs to foreign countries.

"It pays for the creation of those jobs by saying that those who outsource those jobs can't get off the hook and have to pay their taxes," said Robert E. Andrews, D-N.J.

Multinational corporations have argued that the changes would harm their ability to compete in overseas markets, and they noted that many of the complex ideas have not been aired.

Republicans complained about the 11th-hour negotiations and said they received the final text of the measure just minutes before debate began on the rule.

"Nobody even knows what's in it," said Pete Sessions, R-Texas. "The Senate has already gone home. . . . So, what is the point? Why is the Speaker having this bill today on the floor?"

Ways and Means Chairman Sander M. Levin, D-Mich., dismissed the GOP complaints. "The basic bill has been here for more than a week, so anyone who says they don't know what's in it has failed to read. It says and means jobs and jobs and jobs," he said.

— Ellyn Ferguson contributed to this story.

Publication Details

Newsletter Article


Medicare Agency Will Briefly Delay Cuts in Doctor Payments

By Emily Ethridge, CQ Staff

May 28, 2010 -- With a 21-percent payment cut slated to take place June 1 for doctors who see Medicare patients, the Centers for Medicare and Medicaid Services has notified physicians that it will delay processing claims for two weeks.

Efforts to prevent the cuts before the deadline have run out of time. The House on Friday approved a $22.9 billion provision in a package of tax and benefit extensions that would block the cuts through the end of 2011 and provide physicians a small increase each year. The vote was 245-171, largely along party lines.

But the Senate is not expected to address the extenders package until June 7 at the earliest.

CMS told its contractors to hold claims for Medicare reimbursement for 10 business days "to avoid disruption in the delivery of health care services to beneficiaries and payment of claims for physicians," the agency said in a letter to providers.

That buys Congress some time to prevent physicians from feeling the cuts, but not much. On June 14, CMS contractors will process claims for physician services performed June 1 — the first day doctors will see the 21 percent cuts mandated under the formula used to pay providers who see Medicare patients.

Michael C. Burgess, R-Texas, who is a physician, and who voted for the extension, said the planned processing delay would offer little comfort to physicians with small practices. "Do you know what happens when you hold a check in a one- or two-doctor office for two weeks?" he asked. "That doctor doesn't have a paycheck at the end of the month — their margins are so tight."

When senators return in June, they are expected to offer amendments to the extenders package that contains the 19-month "doc fix." Any changes prior to Senate passage would send the bill back to the House for another vote.

AARP Executive Vice President Nancy LeaMond urged the Senate to take up the bill immediately after the recess.

"Older Americans — and the physicians who treat them — should not continue to be held hostage by Band-Aid patches to an unworkable sustainable growth rate formula," LeaMond said.

Under the House-passed measure, physicians would receive a 2.2 percent payment increase for the remainder of 2010 and an additional 1 percent increase in 2011. After that, payment rates would return to the current sustainable growth rate formula, widely viewed as flawed — setting up a 33 percent cut in the 2012 payment.

"The truth is we should be doing a lot more than this. We need a permanent fix," said Energy and Commerce Chairman Henry A. Waxman, D-Calif.

Ways and Means Ranking Republican Dave Camp of Michigan blamed the Democratic leadership for failing to secure a permanent solution, blasting "a fix that expands the deficit by $22.9 billion, kicks the can 19 months down the road, has doctors facing a 33 percent cut in 2012, and will force us to spend billions more," he said.

The American Medical Association (AMA), a physician interest group, slammed the Senate for leaving town without addressing the cuts.

"Senators are more interested in heading home for the holiday than in preventing a Medicare meltdown for seniors," said AMA President J. James Rohack. "The 21-percent Medicare physician payment cut has been looming all year, and yet all Congress has managed to do is repeated short-term delays. This is a complete mismanagement of a health care program that America's seniors and the disabled rely on."

American College of Cardiology CEO Jack Lewin called the delay "the worst-case scenario" for patients and providers. "Medicare shouldn't be a political football held captive to election year politics," Lewin said. "This Band-Aid approach is fiscally irresponsible and does nothing to control the costs of Medicare."

Publication Details

Newsletter Article


Employees with Health Insurance Worry over Rising Costs, Survey Finds

By Jane Norman, CQ HealthBeat Associate Editor

May 24, 2010 -- When it comes to health care coverage, it's all about the money — even among Americans with relatively stable health insurance coverage.

That's a key result from a survey of employees and their spouses by the consulting firm Hewitt Associates, conducted for the National Business Group on Health and released Monday. Among the more than 3,000 workers, most of them employed by large businesses with group plans, an overwhelming majority — 94 percent — said controlling health care costs is what's important to them as the health care overhaul plays out.

In last place among their priorities was a requirement that every American have health insurance, seen as important by just 48 percent of those surveyed. Workers were asked to rate a variety of factors as very important, important, not very important and not important at all.

Cathy Tripp of Hewitt said the survey was taken in February and March, prior to the enactment of the new health care law. "It was almost twice as important to consumers that took this survey that costs were controlled" than ensuring that everyone has insurance, she said. About 70 percent of those who took the survey were very concerned about costs, particularly those who were older, female or had chronic illnesses, she said.

Helen Darling of the business group, which is non-partisan and represents large employers, said that employers have been discouraged in many cases to find employees aren't as engaged in their own health care behavior or decisions as they should be. Yet businesses are under pressure to keep costs down and help employees stay healthy, she said.

The survey was done to help employers get an idea of what drives behavior change, how employees have been affected by the economic downturn, what encourages workers in terms of getting healthy and which employer-sponsored programs attract employees. The survey included 3,026 men and women between the ages of 23 and 69 either working at large employers or with spouses who worked for large employers, all with employer-sponsored coverage.

Tripp said employees know how to get healthy but aren't taking action to improve their health. She pointed to survey results that found people are best at getting screenings or knowing "numbers" — for example, their blood pressure readings or weight. They don't do as well when it comes to exercise, seeking health advice and maintaining a healthy diet. "The thing people struggle with the most is exercise," Tripp said.

The No. 1 obstacle to being healthy is not knowing what information to trust, cited by 58 percent of those surveyed. Other common problems are confusing information about health and workers' lack of knowledge about what's covered by their plans or what services might cost.

Hewitt officials said the survey found that participation in employer-sponsored programs is low but satisfaction is high once employees do sign up. Workers said the tools that would help them the most would be personalized reminders about screenings, personalized healthy lifestyle plans and an online personal health record. Those they saw as least helpful were health coaches and a physical tool kit to manage paperwork.

Publication Details

Newsletter Article


Feds Ask That Virginia Suit Challenging Health Care Law Be Dismissed

By Jane Norman, CQ HealthBeat Associate Editor

May 25, 2010 -- The Justice Department has filed a brief arguing that a lawsuit by the commonwealth of Virginia challenging the new health care law would overturn "decades of settled precedent" and should be dismissed.

The federal government said in its brief, filed on Monday, that Virginia does not have any standing to sue over the individual mandate, similar to an argument that Justice made in response to a separate suit filed in Michigan also challenging the constitutionality of the new law.

But the standing is not the only issue, the department's lawyers argued. "Even if Virginia could surmount this jurisdictional barrier, its claim still would fail because Congress, in adopting the minimum coverage provision, acted well within its authority under the Commerce Clause," says the federal government brief filed in U.S. District Court for the Eastern District of Virginia.

"Congress understood that virtually everyone at some point will need medical services, which cost money. The [Affordable Care Act] merely regulates economic decisions on how to pay for those services — whether to pay in advance through insurance or attempt to do so later out of pocket — decisions that substantially affect the vast, interstate health care market."

Virginia Attorney General Kenneth T. Cuccinelli II filed suit on March 23, hours after the health care law was enacted, against Health and Human Services Secretary Kathleen Sebelius, acting in her official capacity. Cuccinelli asks for the law to be declared unconstitutional because of its requirement that every American have health insurance.

But the Justice Department says that mandate is a linchpin of the new law. As premiums increase and healthy people decide to not purchase health insurance, that self-selection narrows the risk pool and makes premiums increase anew, creating a "premium spiral," says the brief. Those people also use emergency room services and shift costs onto providers, public programs and people with insurance, says the brief.

"In the aggregate, these economic decisions regarding how to pay for health care services — including, in particular, decisions to forgo coverage and to pay later or, if need be, to depend on free care — have a substantial effect on the interstate health care market," the brief says. "Congress may use its Commerce Clause authority to regulate these direct and aggregate effects."

The brief also says regulation of an interstate market that consumes more than 17.5 percent of the annual gross domestic product is well within congressional authority.

"Congress has repeatedly exercised its power over this field, both by providing directly for government-funded health insurance through the Medicare Act, and by adopting over a period of more than 35 years numerous statutes regulating the content of policies offered by private insurers," it adds.

But Cuccinelli said that if someone decides to not buy insurance, that person is not engaging in commerce, and "just being alive" does not constitute interstate commerce.

"If it were, there would be no limit to the Commerce Clause and to Congress's authority to regulate everything we do," he said in response to the Justice brief. "If Congress has the power to force Americans to buy health insurance, then there's nothing to stop Congress from forcing us to buy any product."

Virginia is in a unique position to argue the constitutionality of the individual mandate, officials there say.

The General Assembly in Virginia approved and the governor has signed into law a measure saying the federal government can't require Virginia residents to buy health insurance. Because of that state law and its conflict with federal law, Virginia has not joined a suit filed by 20 other states in federal court in Florida challenging the federal law.

"The Virginia law protects our citizens from being forced to buy health insurance against their will," said Cuccinelli.

Cuccinelli has until June 7 to respond to the motion to dismiss, and the government then will have until June 22 to respond.

Publication Details

Newsletter Article


The Check Is in the Mail for Some Medicare Part D Enrollees

By Jane Norman, CQ HealthBeat Associate Editor

May 27, 2010 -- Checks for $250 each will be distributed beginning June 1 to seniors who have fallen into the "doughnut hole" when it comes to their prescription drug plans, Health and Human Services Secretary Kathleen Sebelius said Thursday.

Sebelius said in a briefing with reporters on implementation of the new health care law that about 80,000 seniors initially will see the checks in their mailboxes. Some 4 million seniors should qualify by the end of the year, HHS officials said. They don't have to sign up or apply because their drug billing activity will be automatically monitored by Medicare.

The money will got to those with Medicare Part D prescription drug plans who exhaust their regular drug benefits and have to pay all of their drug costs until they qualify for catastrophic care.

Eventually the doughnut hole will be eliminated under the law, but the $250 checks are a first step.

Sebelius' comments came as administration officials continue to stress the portions of the law that are going into effect right away, or even earlier than planned.

She said that a new brochure on closing the doughnut hole has been sent out to Medicare recipients. A similar brochure sent to Medicare enrollees earlier this week stirred a storm of protest from Republicans who said it contained "propaganda" about the new law and information irrelevant to seniors.

Sebelius also said she met Thursday with several insurance company CEOs to discuss plans for putting in place a "patient's bill of rights" for consumers when dealing with insurance companies.

She said she reminded the CEOs that the law gives HHS new tools to monitor premium increases — although not block them — including review of rate hikes.

"As we proceed, we'll continue to look for opportunities to work with insurance companies but also keep a close watch to make sure they treat their customers fairly," she said.

She did acknowledge that the insurers told her that rates are now at a "crisis point," with people dropping coverage due to rising premiums. The new law, which is supposed to extend access to insurance for all Americans, does not go fully into effect until 2014, and it does not have a mechanism to directly curb premium increases.

"I think the insurers seem very aware of the fact that cost control, all of us working together on it, is something that's going to be very important in these intervening years," Sebelius said. The government also is interested in strategies on cost control implemented by the private firms, she said.

"We're going to be looking very carefully at what's happening in those marketplaces going forward," she said. "The worst of all worlds is to have more Americans driven out of the market in the next couple of years and end up with an actually sicker population, if you will . . . when we hit 2014."

Publication Details

Newsletter Article


Companies Leap at Chance to Share in $5 Billion from Health Care Law

By Jane Norman, CQ HealthBeat Associate Editor

May 25, 2010 -- The White House is looking for good news to spread these days when it comes to the new health care law, and found it Tuesday in the form of a study from Hewitt Associates.

Hewitt, a consulting firm, said it conducted a survey that found that most employers who offer retiree health benefits plan to participate in a new program that would offset their costs for early retiree medical claims.

Authorized under the law, the Early Retiree Reinsurance Program offers businesses a chance to get in line for some $5 billion that will be handed out by the government beginning in June.

People who retire before they're 65 — the minimum age for Medicare — often have trouble obtaining affordable health insurance, and the concept is the temporary program will encourage employers to retain health insurance for their retirees. Nonprofits, religious groups and state and local governments also are eligible, as are both self-funded plans and insured plans.

Employers will have to apply to be in the program and if accepted can use the savings to reduce their own health care costs, provide premium relief to workers and families or a combination of both, according to the administration.

While companies' willingness to accept money from the government might seem unsurprising, the development was highlighted on the White House blog. "We knew business leaders and retirees were excited about this program and a new study confirms that companies are eager to sign up and continue to provide coverage their early retirees," wrote Stephanie Cutter, a top communications aide to President Obama.

They've got to move fast because the money runs out after the $5 billion is gone or Jan. 1, 2014, arrives, whichever is first.

Hewitt surveyed 245 large employers that offer benefits to more than 1.3 million retirees and found 76 percent of them will pursue reimbursement. The program allows employers to claim reimbursement for up to 80 percent of claims costs between $15,000 and $90,000.

The law requires that the money be used to reduce plan costs but the Hewitt survey found two-thirds of companies haven't yet decided how they will do that and were waiting for more guidance from the government. Another 16 percent said they were considering using the money to reduce premiums for both retirees and the employer and 5 percent said they were considering reducing just retiree premiums.

Cutter pointed out that in 1988, 66 percent of large companies offered benefits to retirees but that dropped to 31 percent by 2008. "The early retiree reinsurance program will help maintain current coverage until 2014, when millions of Americans will have affordable coverage options through the new health insurance exchange," she said.

Publication Details

Newsletter Article


Kaiser Report Analyzes State-by-State Impact of Medicaid Expansion

By CQ Staff

May 26, 2010 -- The expansion of Medicaid under the new health care law will mean a decrease in the numbers of the uninsured and a significant increase in public coverage, with most of the tab picked up by the federal government, according to a new report by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured. A state-by-state analysis by the Urban Institute for the foundation shows the distribution of new enrollees and costs. The report uses two methods to estimate Medicaid enrollment and coverage.

Publication Details