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November 7, 2005

Washington Health Policy Week in Review Archive ddbda75b-b3a5-4799-8963-07e5be081bc1

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Balancing Act Tricky for House GOP

NOVEMBER 3, 2005 -- House GOP leaders face a delicate balancing act in coming days as they seek to persuade GOP moderates to support a budget-cutting package while maintaining the support of an influential bloc of conservatives.

Securing passage of the House savings bill—after the Senate's 52–47 vote Thursday to pass its package of $35 billion in savings—will be a major test for House Majority Leader Roy Blunt, R-Mo., who took over as the GOP's floor leader after Tom DeLay, R-Texas, was indicted by a Texas grand jury in September.

Blunt and House Speaker J. Dennis Hastert, R-Ill., acknowledged Thursday that they do not yet have the votes to win floor passage of $53.9 billion in budget cuts approved Thursday by the House Budget Committee on a 21–17 vote. Blunt and Hastert want to bring the bill to the floor next week, but that timing is uncertain.

In the Senate, GOP leaders won over wary moderates by including—along with the cuts—some popular new spending initiatives, like Medicaid benefits for victims of Hurricane Katrina, and by blunting the effect on the poor of some spending reductions.

The challenge is tougher for House GOP leaders, who must appease a large group of conservatives that has pushed for more spending cuts.

After meeting with his caucus Thursday, Blunt signaled that he is willing to make changes to win votes. "We are open to doing what we need to do," to secure 218 votes needed to pass the savings package, he said.

Pressure from Moderates
Already, House GOP leaders appear to be considering removing language from the bill that would pave the way for oil drilling in the Arctic National Wildlife Refuge (ANWR) because of opposition from moderates.

The House package, as it currently stands, may have less appeal to House moderates than the Senate package held for moderates in that chamber. The House bill would reduce spending in the next five years in a number of politically sensitive programs, including Medicaid, food stamps for immigrants, and agriculture.

In the Thursday morning Republican caucus meeting, Budget Chairman Jim Nussle, R-Iowa, described his plan and led a call and response session, rallying the troops to support his plan. Nussle could be heard down the hall shouting: "We have a plan! For reform! To achieve savings!" to cheers from the assembled rank and file.

But GOP moderates were making no promises as they exited the meeting clutching summaries of Nussle's plan. Sherwood Boehlert, R-N.Y., said he had concerns about the package, and said that all elements—as well as a $70 billion tax cut package scheduled for consideration later this month—should be on the table. "Everything is in play right now," Boehlert said. "I'm troubled by a number of provisions in the overall plan."

Vernon J. Ehlers, R-Mich., a moderate, said he would not support the bill if it includes provisions on ANWR drilling.

With Democrats expected to be united in their opposition to the GOP plan, Blunt and Hastert have little room for error.

"I fully expect we'll have 100 percent of Democrats voting against the reconciliation bill," said House Minority Leader Nancy Pelosi, D-Calif. "We'll make this budget very hot for the Republicans to handle."

House conservatives expressed confidence that Blunt and Hastert will be able to pull together the votes, and said they understand that deals with individual lawmakers will be necessary. But they warned that they will watch the budget scoreboard to ensure it does not change significantly.

"The focus right now for conservatives is that we reach $50 billion in savings over the next five years," Mike Pence, R-Ind., leader of the conservative Republican Study Committee, said in an interview. "How we get there is important, but not as important as getting there."

GOP leaders say they will follow the spending bill with a tax reconciliation bill, which can include as much as $70 billion in tax breaks under terms of the fiscal 2006 budget resolution (H Con Res 95).

But the tax cut bill appears to be in flux as GOP leaders marshal their resources to pass the spending reduction bill and the remaining appropriations bills before Thanksgiving. Blunt said he wants a floor vote on the tax bill the week of Nov. 14, but suggested that a final conference agreement could wait until early 2006.

Some moderates are wary of voting for additional tax cuts as they cut spending. But other GOP lawmakers are eager to vote on the tax cut bill, which has particular appeal to their base. "It's one of the things people are waiting on," said Ray LaHood, R-Ill.

The vote to approve the savings package in the House Budget Committee Thursday illustrated the various sticking points House GOP leaders will have to address before floor passage can be assured. For example, one Republican, Connie Mack of Florida, joined Democrats in opposing the measure, because of an offshore drilling proposal in the bill.

Under budget reconciliation rules, the panel was not allowed to amend the bill. Rather, the committee combined the spending cut recommendations approved earlier by eight authorizing panels and confirmed that they met their savings targets.

The original overall savings target required by the fiscal 2006 budget resolution was $34.7 billion. However, under intense pressure from conservatives, House GOP leaders pressed for savings of at least $50 billion after Congress in September appropriated $62.3 billion in emergency spending to meet relief and recovery costs stemming from hurricanes Katrina and Rita (PL 109-61, PL 109-62). Most authorizing panels exceeded their revised goals.

Nussle refuted Democrats' assertions that the cuts would cause significant pain, noting that the savings amounted to less than one-half of 1 percent of total mandatory spending projected over five years.

But John M. Spratt Jr. of South Carolina, the ranking Democrat on the panel, retorted, "In truth this bill has nothing to do with paying for Katrina; it has everything to do with facilitating further tax cuts."

To "remove the illusion," as Spratt put it, that the cuts would reduce the budget deficit, Democrats offered a motion calling on the chairman to request the House Rules Committee report a rule that allows the mandatory savings package to be considered only after the tax cut bill has been considered by the House. It was rejected along party lines, 17–22.

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New Studies Find Growth in Uninsured Outpacing Federal Spending on Health Safety Net

NOVEMBER 4, 2005 -- Federal spending on the uninsured has not kept pace with the growing number of Americans who have no health care insurance, according to a report released Friday.

As the number of uninsured Americans increased by 4.6 million from 2001 to 2004, net federal spending per uninsured person fell $546, to $498, during the same period, according to the findings from the Kaiser Commission on Medicaid and the Uninsured. After adjusting for inflation, total federal spending for care for the uninsured increased by 1.3 percent from 2001 to 2004 while the number of uninsured increased by 11.2 percent, resulting in an 8.9 percent decline in federal spending per uninsured person.

The commission released five reports Friday that profile the growing uninsured population and portray the health care safety net as increasingly strained to the meet the needs of the uninsured.

"In the absence of providing health insurance coverage for our nation's growing uninsured population, some have said that the uninsured can receive care when they need it through the nation's health care safety net," Diane Rowland, the commission's executive director, said in a news release. "The new studies and personal stories released today document the increasing burden health providers are facing in delivering needed care."

One of the studies released Friday found that while federal funding for community health centers increased by more than 50 percent over the past four years, the money accounts for less than 3 percent of total federal spending on the health care safety net. The study, prepared by Jack Hadley and colleagues at The Urban Institute, also noted that since more than 70 percent of federal support for the uninsured comes from Medicare and Medicaid—which are both facing budgetary pressures—it is unlikely those programs will be able to provide more funding for the uninsured.

Other findings from the Commission studies include:

  • All of the 6 million increase in the number of the uninsured from 2000–04 was among adults and two-thirds of the increase was among people with incomes below 200 percent of the poverty level, which is about $39,000 for a family of four in 2004.
  • Half of the growth in the uninsured was among young adults (ages 19–34) who experienced sharp declines in employer coverage rates. Fifty-four percent of the growth occurred in the southern region of the country, which experienced the greatest growth in both the general population and low-income population combined with the largest decrease in employer coverage. This contributed to the 3.2 million increase in uninsured people in the South alone.
  • Immigrants are disproportionately more likely to be uninsured because they often work in low-wage jobs that are less likely to offer health coverage, and immigrants face restrictions on their eligibility for coverage in public health insurance programs. But immigrants have not driven the recent growth in the uninsured. Between 2000 and 2003, when the economy slowed, native citizens made up 3.6 million of the 5.1 million more uninsured.

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Study: Care Abroad Cheaper, Faster, On the Whole No Better

NOVEMBER 4, 2005 -- Americans are much likelier to skip care because of costs and to get hit with high out-of-pocket expenses than are the British, Canadians, Australians, Germans, and New Zealanders, according to a report released Thursday by the policy journal Health Affairs. The survey was conducted by Harris Interactive for The Commonwealth Fund, a nonpartisan think tank.

But the study shied away from concluding that any one of the countries had the best or worse health care system overall, noting that all six suffered from poorly coordinated care, medical errors, and faulty medical management of chronic diseases.

The countries of study were chosen for the survey because of their participation in an ongoing health symposium organized by The Commonwealth Fund.

The findings revealed a stark contrast between out-of-pocket spending in the United Kingdom and the United States. In the United Kingdom, 13 percent of adults reported foregoing at least one of the following in the past year because of costs: prescription drugs, a trip to the doctor when ill, testing, treatment or follow-up care. The United States had the highest percentage of adults who skipped care—51 percent—followed by Germany at 38 percent.

Sixty-five percent of Britons said they had no out-of-pocket care costs in the past year, compared with 15 percent of Americans. Thirty-four percent of Americans reported out-of-pocket health spending exceeding $1,000 in the past year, compared with 4 percent of Britons.

The United States also had the highest rate of patients reporting "coordination of care" problems, the study found. One-third of U.S. respondents said within the past two years, either the test results or records were not available at the time of a doctor's appointment, or that a doctor had ordered a test that had already been done.

But medical error rates and care coordination problems were high in all the countries. Each country could "gain through strategies to improve the quality and efficiency of care, such as implementing modern information technology systems, supporting patient engagement in care, and improving management of chronic conditions," said Karen Davis, president of The Commonwealth Fund, which funded the study.

Majorities of patients in Germany, New Zealand and the United Kingdom reported "easy" access to care at night, on weekends or on holidays. Most Americans, Australians, and Canadians said it was difficult to get after-hours care.

Most patients in New Zealand and Germany could get same-day appointments, compared with 30 percent of U.S. patients. But only 8 percent of Americans reported waits of four months or more for non-emergency surgery, while 41 percent of Britons did so. Seven percent of American adults who had been hospitalized in the past two years reported developing an infection while in the hospital, compared with 10 percent of adults in the United Kingdom and 3 percent of those in Germany.

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The Consumer Take: 'Incredible' Job on Medicare Drug Benefit, But Too Many Choices Could Cause Backlash

NOVEMBER 1, 2005 -- Researchers and lobbyists savvy about the viewpoint of Medicare drug beneficiaries said Tuesday that the Bush administration has done a great job of attracting prescription drug plans, but expressed doubt about the high number of choices and quality of tools currently available to help consumers sort through the options.

These were representative of the views expressed by a consumer panel at a Washington conference on the Medicare prescription drug benefit.

Congress could face a backlash from seniors depending on how it handles their concerns, cautioned one of the panelists at the National Medicare Prescription Drug Congress, sponsored by the policy journal Health Affairs and the consulting firm Avalere Health.

Efforts by the Centers for Medicare and Medicaid Services to bring prescription drug and managed care options into Medicare drew praise from the panel, which included AARP policy director John Rother, Kaiser Family Foundation Vice President Tricia Neuman, and University of Maryland Professor Bruce Stuart.

"CMS has done an incredible job bringing everything together," Newman said. "To say that plans have stepped up is a world-class understatement." She also praised the enthusiastic efforts of Social Security Administration staff to link up low-income beneficiaries with the comprehensive drug benefits they can receive under the Medicare overhaul law (PL 108-173).

But Neuman said most beneficiaries will have at least 40 choices to sort through on average, and may have difficulty comparing out-of-pocket costs charged by plans when they take multiple medications and fall into the "donut hole"—the portion of coverage in many Medicare drug plans in which beneficiaries will have to pay 100 percent of prescription drug costs.

Neuman expressed hope that planned additions to the "Plan Finder" on CMS's Medicare Web site would simplify "apples to apples" comparisons of out-of-pocket costs. Medicare has said features simplifying plan comparisons will be in place before enrollment begins Nov. 15. "I'm really hoping the Plan Finder will put it all together," Neuman said.

Neuman said it's unclear if the volume of plans from which many beneficiaries will choose will be a deterrent to enrollment.

She wondered if a study about jam sold at supermarkets might hold lessons for how drug beneficiaries would react to their choices. The study, by Sheena S. Iyengar of Columbia University and Mark R. Lepper of Stanford University, showed that shoppers were more likely to buy from a display that had six choices of jam compared to one that had 24 choices.

The drug plans "do vary in significant ways," she noted. Neuman said her sense is that seniors want one-on-one counseling and advice on which plan to select.

Stuart said research is needed to identify the way that beneficiaries will behave once their expenditures reach the donut hole. Evidence suggests that with other types of health coverage they are less likely to go to the doctor and get preventive care if their insurance coverage runs out.

"I know we all heard the expression, 'let a thousand flowers bloom,' but I don't think the drafters ever anticipated this much choice," said Rother. All of those choices could segment people with higher drug spending into certain plans and those with lower spending into other plans, he noted. That would lead to unaffordable premiums eventually to the higher spending beneficiaries, causing instability by forcing them to switch plans, he said.

There could be "a little bit of backlash among beneficiaries around the issue of choice," he said. "Maybe private plan consolidation [in Medicare] could be thought of as an upside if there are fewer plans and the better plans prevail."

Rother predicted that managed care plans in Medicare, which are expected to have more generous drug benefits, will attract many beneficiaries. But that in turn could lead to a return to demands for a consumer bill of rights for people enrolled in managed care plans, he suggested.

Rother also predicted that beneficiaries will react strongly to rising drug costs, creating more pressure on Congress to allow access to cheaper foreign drugs and to grant the Health and Human Services secretary negotiating authority over prices charged in Medicare.

Corrects who performed study measuring consumer reaction to large number of choices.

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U.S. Comptroller General: Nation Can't Afford 'Imprudent' Medicare Drug Benefit

OCTOBER 31, 2005 -- U.S. Comptroller General David Walker said Monday the nation can't afford the new Medicare prescription drug benefit.

"We were already in the hole 15 to 20 trillion dollars before Medicare Part D [the drug benefit] was enacted and that's just for Medicare," said Walker, head of the Government Accountability Office. "And we added another eight" trillion for the benefit. "If that's not imprudent, I don't know what is."

Walker's figures referred to GAO's analysis of the 75-year fiscal outlook for Medicare, which compares promised benefits to existing revenue sources.

Walker delivered his remarks at a forum sponsored by the left-leaning Brookings Institution, the right-leaning Heritage Foundation, and the National Press Foundation. They came at the start of a week in which Sen. John McCain, R-Ariz., and other lawmakers are expected to offer amendments to budget legislation that would delay the benefit from opening to enrollment as planned on Nov. 15. Walker's comments may provide high-profile support for the lawmakers' position. But the Bush administration and GOP congressional leaders have said they do not favor a delay.

Walker portrayed his comments as an assessment of the nation's budget outlook rather than specific policy prescriptions. But after remarks depicting Medicare as a far greater part of the nation's long-term fiscal crisis than Social Security, Walker cited the drug benefit as an example of the country moving in the wrong direction.

Asked during a question and answer period whether the benefit should be delayed, Walker said "that's a policy decision. Let's just say that we couldn't afford Part D of Medicare," which Congress passed in 2003 as part of the Medicare overhaul law (PL 108-173).

"It's one thing to say we need some type of prescription drug program. That's valid," he said. "But we need to do that as part of a restructuring of the entire Medicare system and not a layering on of a program that was started in 1965."

Walker did not specifically address other changes in the 2003 law giving a broader role for private plans, but it was clear from his remarks that he believes far greater changes are needed.

His remarks could be construed as favoring a system in which the federal government makes fixed monetary contributions for the care of Medicare beneficiaries, but does not mandate delivery of a fixed package of benefits regardless of cost. Walker did not specifically say he was endorsing "defined contribution" reforms, however.

Walker has called numerous times for controls on Medicare and Medicaid spending, but in a general way. He gave unusual emphasis to the drug benefit Monday. The benefit by itself adds more than twice as much to the nation's projected long-term deficit than does Social Security, he said.

Walker said the Medicare program overall contributes to the long-term fiscal deficit eight times more than Social Security.

But Walker hammered hard at health care costs in general at the forum, which Brookings Economic Studies Director Isabel Sawhill said followed a number of recent events with the Heritage Foundation she described as a "fiscal wake-up tour."

"There is a lot of agreement now on what the nature of the problem is, and the problem is very serious," Sawhill said. "Our elected officials unfortunately are not dealing with this effectively."

Illustrating the impact of unrevised entitlement spending on the nation's future finances, Walker said that if all tax cuts were made permanent and discretionary spending were to grow at the rate of the economy, all federal spending could go to pay interest on the federal debt in the years after 2040. "If all we try to do is try to deficit-finance our way out of this, the government could be doing nothing more than paying interest on the large accumulated debt by the time you get out a little while beyond 2040," he said.

"We're going to have to reform not just Medicare and Medicaid, we're going to have to reform the entire health care system," he said. Federal tax policy does not count health benefits as income, fueling the spending problem, he said.

Walker said among the "deficits" the nation faces is "a leadership deficit." He urged adoption of "pay-as-you-go" rules to make sure legislation is funded, and said "we need more automatic triggers that will force reconsideration of certain programs," referring to entitlement programs.

Walker said that the revenue side of government spending also needed to be reconsidered. "We can't afford to make all the tax cuts permanent," he said. "When you're trying to deal with the bottom line, you can't just exempt one side of the budget. You need to consider both the spending side and the revenue side if you're trying to balance the books and make sure that the government can pay its bills today and deliver on its future promises."

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