By Mary Agnes Carey, CQ HealthBeat Associate Editor

October 18, 2007 -- Democratic presidential candidate Sen. Hillary Rodham Clinton of New York said Thursday her health care proposal provides a "sensible, centrist" approach to achieving universal coverage, and that if elected president, she would work closely with Congress to craft legislation, conceding that the White House task force that assembled her 1993 health care plan was the wrong approach.

"I know how important it is to work out the details in consultation with Congress," Clinton said, adding that she has "no intention" of producing specific legislation, but rather providing a framework with specifics to come later.

Speaking at a presidential forum hosted by Families USA and the Federation of American Hospitals, Clinton dismissed claims from her Republican opponents that her health care plan would add to the federal bureaucracy. She described such charges as "old tired accusations" and said that the GOP candidates' proposals on health care "would not help the vast majority of Americans."

"This is a different plan, this is a different time, this is a different country when it comes to health care," she said. Fixing problems with the nation's health care system "will require a lot of political will," she said. Health care will be her highest domestic policy priority and that she plans to "get it done" in her first term as president, Clinton said.

"The playbook that has been brought out every election is out of date," Clinton said. Her plan to offer a menu of health care choices similar to those that federal employees—including members of Congress—receive would simply add more competition to the health care marketplace, she said. "What are we afraid of? Let's see where the competition leads us."

On Medicare, Clinton said she would allow the government to negotiate prescription drug prices for beneficiaries and said that "inefficiencies and exorbitant costs" in the Medicare drug benefit "must be examined."

A report released Monday by the Democratic staff of the House Oversight and Government Reform Committee concluded that the administrative costs of the Medicare drug benefit, which is run by private insurers, are almost six times higher than the administrative costs of the traditional Medicare program, adding up to about $180 per person—or almost $5 billion—in 2007.

Clinton said the 12 million undocumented immigrants now in the United States would receive emergency room care and treatment for "acute medical services," but would not otherwise be covered under her plan. "As a general rule, people who are here illegally would not be eligible" for coverage, Clinton said, saying that the focus must be on expanding health care for U.S. citizens and legal immigrants.

By Mary Agnes Carey and Martha Angle, CQ Staff

October 15, 2007 -- Delivering the Medicare drug benefit through the private sector has done more to enrich the profits of insurers and pharmaceutical companies than to save seniors and taxpayers money, according to a report released Monday by the Democratic staff of the House Oversight and Government Reform Committee.

Among its findings, the report concludes that administrative costs of the Medicare drug benefit, which is run by private insurers, are almost six times higher than the administrative costs of the traditional Medicare program, adding up to about $180 per person—or almost $5 billion—in 2007. Of that, about $1 billion is profit for the insurers, the report said. It also found that administrative and sales expenses, plus profits for the insurers offering Medicare drug plans, account for 9.8 percent of overall Part D spending.

The report, commissioned by Chairman Henry A. Waxman, D-Calif., was based on an analysis of proprietary cost and pricing data obtained from 12 insurers providing drug coverage to more than 18 million Medicare patients, or about 75 percent of those enrolled in Medicare Part D.

The drug benefit, enacted in 2003, took effect in 2006. "The cost and pricing data obtained by the committee reveal that use of private insurers to deliver Medicare drug coverage is driving up costs and producing only limited savings on drug prices," the report said.

While the Centers for Medicare and Medicaid Services (CMS) had no immediate comment on Waxman's report, agency officials have said repeatedly that the Medicare drug benefit has been a success. Last month, CMS announced that Medicare beneficiaries in every state will have a choice next year of at least five prescription drug–only plans with monthly premiums below $25, and that 90 percent of beneficiaries will be able to pick a plan charging lower premiums than they will pay this year.

Karen Ignagni, president and CEO of America's Health Insurance Plans, said the industry's "track record speaks for itself" with premiums 40 percent less than originally projected, Medicare actuaries twice reducing the cost of the program, and policies that offer beneficiaries more benefits and lower cost-sharing. "On all of those measures we have beaten expectations," she said.

Medicare drug insurers have negotiated discounts in the form of rebates from pharmaceutical companies that will reduce spending by 8.1 percent in 2007, the figure is far less than the 26 percent the Medicaid program secured from drug manufacturers. Medicaid is a state and federal insurance program for the poor. In addition, Part D insurers receive no rebates or other manufacturer discounts for three-quarters of the drugs used by seniors, according to the analysis.

The Pharmaceutical Care Management Association, a trade group representing pharmacy benefit managers (PBMs), said its work with Medicare Part D plans has reduced costs 30 percent below government projections for the drug benefit, which, in turn, has reduced monthly premiums. PBMs also have helped to increase the use of generics and PBMs "aggressively negotiate discounts with brand manufacturers."

If the Medicare drug benefit's administrative expenses were lowered to those of traditional Medicare and drug prices were lowered to those found in the Medicaid program, taxpayers and Medicare beneficiaries enrolled in the drug benefit would have saved $15 billion in 2007, the report concludes.

Committee staff said Medicare drug plans are filling 59 percent of prescriptions with generic drugs, which are cheaper than brand-name pharmaceuticals. That is better than Medicaid, which fills only 54 percent of prescriptions with generic drugs, but falls well short of the 68 percent achieved by the Department of Veterans Affairs, the report said.

By Drew Armstrong, CQ Staff

October 18, 2007 -- The House failed to override President Bush's veto of legislation to expand a children's health insurance program, despite weeks of pressure from Democrats and outside advocacy groups.

The tally Thursday was 273–156, or 13 votes short of the two-thirds majority needed to override the president's Oct. 3 veto of the bill (HR 976). Although the override attempt drew eight more votes than the 265–159 final passage vote on Sept. 25, all of the additional votes came from Democrats. Not a single Republican vote was switched.

The measure would have expanded the State Children's Health Insurance Program, or SCHIP, by $35 billion over five years, to $60 billion, with the costs offset by increased tobacco taxes.

The Senate passed the measure last month by 67–29, more than the two-thirds majority required to overcome a veto. But with the House failure to override, the legislation dies.

House Speaker Nancy Pelosi, D-Calif., said Democrats would immediately begin work on another SCHIP bill to send to the Bush. Pelosi would not offer details about how the bill might change except to say that Democrats will not consider a different funding offset, and will demand that a new bill cover 10 million children, up from an estimated 6.6 million currently covered.

"In the next two weeks, we intend to send the president another bill that insures and provides health care for 10 million children in our country," Pelosi said. "The president and his allies in Congress today may have stopped the SCHIP bill today but we still will not allow that to deter us from our goal.

Republicans Stand Fast
On the veto override attempt, 44 Republicans joined 229 Democrats in voting to override. That was one fewer than on passage, because Peter T. King, R-N.Y., who voted for the bill Sept. 25, was absent Thursday.

Two Democrats—Jim Marshall of Georgia and Gene Taylor of Mississippi—sided with 154 Republicans in voting to sustain Bush's veto. Both had also voted against the bill when it passed last month.

Six other Democrats who voted "no" the first time around voted to override Bush's veto: Dan Boren, Okla.; Kathy Castor, Fla.; Bob Etheridge, N.C.; Baron P. Hill, Ind.; Dennis J. Kucinich, Ohio; and Mike McIntyre, N.C., as did Diane Watson, Calif., who voted "present" on the earlier roll call.

Bill Delahunt, D-Mass., who missed the Sept. 25 vote was present Thursday and joined fellow Democrats in supporting the override attempt.

Three Republicans who missed the first vote were on hand Thursday and voted against overriding the veto: Barbara Cubin, Wyo., Wally Herger, Calif., and Ted Poe, Texas.

Republicans called for negotiations on a more restrictive, less costly program renewal. "Now that the veto has been sustained, it's time to move forward with a serious plan to extend health coverage for those SCHIP was meant to cover: low-income children," declared Senate Minority Leader Mitch McConnell, R-Ky., in a statement.

House Majority Whip James E. Clyburn, D-S.C., said they would hold fast to their demand that the program be expanded enough to serve 10 million children.

Congress approved a $5 billion extension of SCHIP's authorization through Nov. 16 in the continuing appropriations resolution enacted at the end of last month (PL 110-92), so lawmakers and the White House have a few more weeks to resolve their standoff.

The health program was created 10 years ago by a Republican Congress and Democratic president to provide coverage to children whose families earn too much to qualify for Medicaid but not enough to afford private health insurance.

The program is funded by both the federal government and the states within general federal guidelines. States have some flexibility to create their own eligibility requirements. In 2006, according to the Congressional Budget Office (CBO), 26 states limited eligibility to families earning no more than 200 percent of the federal poverty level; 15 states set a higher threshold and nine states had a lower limit for income eligibility. The CBO analysis estimated that 6.6 million children were covered by SCHIP during some portion of 2006.

Priorities, Philosophy
Bush and his GOP backers—along with the Congressional Budget Office—have repeatedly said the vetoed bill would prompt too many families to drop private coverage for their children, shifting that burden to the government. The president has also said it would permit coverage of youngsters in families with incomes of up to $83,000 per year.

John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, called those claims "outright lies."

Addressing other charges leveled by Republicans, Dingell said, "This bill terminates the coverage of adults under the SCHIP program, and it prohibits its use for illegal aliens."

But Nathan Deal of Georgia, ranking Republican on the Energy and Commerce Health Subcommittee, said the bill needed to be rewritten to "put the poorest children at head of line" for coverage, require states to document the citizenship of recipients, eliminate coverage of all adults except pregnant women as of 2009, and put a net asset cap of $1 million on family eligibility for the program.

Steve King, R-Iowa, denounced the bill as "the cornerstone of socialized medicine."

Room to Negotiate?
Given how close bill supporters came to overriding Bush's veto, Democrats may not need to revise their proposal by much. Bush has signaled he is willing to accept an expansion of the program beyond the $5 billion he proposed earlier this year, provided the additional funding is targeted to provide coverage only to low-income children. But Democrats may try to retain the full $35 billion expansion of the vetoed measure, while tweaking its eligibility provisions slightly in a bid to lure enough additional Republican votes to override any veto.

A GOP proposal to expand the program by $11 billion over five years, sponsored in the House by Tom Price of Georgia and in the Senate by Mel Martinez of Florida, was slated for introduction later in the day.

Their legislation would require states to prove they had covered 90 percent of eligible children in families earning up to 200 percent of the federal poverty level before permitting enrollment of children from families earning up to 250 percent of the poverty level. States have complained that meeting the 90 percent enrollment threshold would be impossible.

The GOP bill would not conform to House pay-as-you-go rules, which require new spending to be offset. A spokesman for Price said the bill would be paid for, but that the spending offsets had not been determined.

By Sasha Bartolf, CQ Staff

October 17, 2007 -- The health of women in America is unsatisfactory, and compared with three years ago, it's growing worse, according to the latest "report card" on women's health released Wednesday by the National Women's Law Center (NWLC).

The 2007 edition of "Making the Grade on Women's Health: A National and State-by-State Report Card," which measured 27 benchmarks, found that the United States now fails to meet 12 of the benchmarks, three more than it did not meet in 2004. Two benchmarks—reducing obesity and providing Pap smears to women age 18 and up—were met in 2004, but are no longer met by any state, according the analysis.

The report is a project of the NWLC and Oregon Health and Science University and assesses women's health in each of the 50 states and the District of Columbia by using health benchmarks designated by the Department of Health and Human Services' "Healthy People 2010" agenda.

The report found that no individual states received an overall grade of satisfactory for the health care services they provided to women. Vermont, Minnesota and Massachusetts met the most benchmarks, while Arkansas, Mississippi, and Louisiana met the fewest.

"The outlook for women's health is nowhere near approaching the nation's goals for 2010 set by the U.S. Department of Health and Human Services Healthy People initiative," said Dr. Michelle Berlin, associate professor at Oregon Health and Science University. "The nation barely improved since our last report . . . Failing to meet these goals undermines not only the health and well-being of women, but the well-being of our country as well."

Categories where benchmarks varied significantly according to racial make-up were the percentage of women receiving prenatal care, the rate of infant mortality, and the percentage of women without health insurance. While the percentage of women receiving first trimester prenatal care improved by almost 5 percent in 2007, the rate still remains unsatisfactory, the report noted. In addition, differences in race among women receiving prenatal care varied significantly: while 85.7 percent of white women receive prenatal care, only 70.8 percent of American Indian/Alaska Natives, 75.9 percent of blacks, and 77.5 percent of Hispanics receive prenatal care as well, according to the analysis.

The report found that the infant mortality rate for black women is considerably higher than that of white women. While the overall rate of infant mortality remains unchanged since 2004, black women have an infant mortality rate of 13.5 deaths per 1,000 live births. Hispanic women have a rate of 5.6 deaths out of 1,000 births, and white woman have an infant mortality rate of 5.7 deaths, also out of 1,000 births, according to the report. In addition, the report found that the rate of breast cancer for black women also is higher than that of all other races.

The national percentage of women who lack health insurance increased by 1.7 percent, the analysis found. Meanwhile, the rate of uninsured American Indian/Alaska Native women is more than double that of white women without insurance, the analysis noted. According the report, 22.7 percent of black women are uninsured and 37.8 percent of Hispanic women are uninsured, compared with 16.9 percent of white women.

The report also found a drop in the number of states that do not have certain reproductive health access policies, such as parental consent and notification requirements for minors, or waiting periods and funding restrictions for abortion procedures. In 2001, 19 states did not have parental notification policies; that number fell to 15 in 2007, the report found. In addition, 27 states in 2007 do not require waiting periods for abortions, down from 31 states in 2004 and 35 states in 2001, according to the report. Meanwhile, the number of states that provide public funds for safe abortion procedures for women who could not otherwise afford them has remained the constant the last six years.

The percentage of women who are obese increased in all 51 states, the only benchmark on which every state's performance dropped.

While the most improved benchmarks among states were death rates for stroke and coronary heart disease, the United States still received an overall "F" grade in both indicators because so much improvement is still needed, the report stated.

"It's nothing to cheer when only a handful of states are meeting at least half of the policy goals," said Judy Waxman, vice president for Health and Reproductive Rights for NWLC. "It is evident that our health system needs mending. Lawmakers must take a comprehensive, long-term approach to meeting women's health needs."

By Joanna Anderson, CQ Staff

October 18, 2007 -- Health care overhaul that incorporates both private and public insurance is the best approach to achieve universal coverage, according to a report released Thursday by The Commonwealth Fund Commission.

The report endorses the mixed approach to address the increasing number of uninsured Americans, as opposed to implementing either a solely private or public system.

"Health insurance reform plans that build on a mix of private and public health insurance, where costs are shared among government, employers, and enrollees, would have great potential to move the system to high performance and would be the most practical to implement," the report found.

The report found a mixed approach would minimize federal budget outlays and dislocation of patients by allowing individuals with employer-based coverage to retain the insurance if they met certain benefit and affordability standards. Such an approach also would address the shortcomings of the current system, such as "gaps in coverage and the absence of the incentives, organization, and infrastructure required for a high performance health system," the report found.

The analysis noted the mixed universal coverage plans that have been enacted in Massachusetts and proposed by California Republican Gov. Arnold Schwarzenegger and Democratic presidential hopefuls Gov. Bill Richardson of New Mexico, former Sen. John Edwards of North Carolina, as well as Sens. Hillary Rodham Clinton of New York, Christopher J. Dodd of Connecticut, and Barack Obama of Illinois. Most of these plans include expansions in Medicaid and the State Children's Health Insurance Program, as well as "new group insurance options with financial support for premiums and out-of-pocket expenses for lower- and middle-income households" designed to fill coverage gaps.

The report also noted the proposals offered by President Bush and GOP presidential candidates Sen. John McCain of Arizona, former New York Mayor Rudy Giuliani, and former Gov. Mitt Romney of Massachusetts that comprise private plans that "would create tax incentives for people to gain coverage through the individual insurance market." Those plans, however, are "unlikely to achieve universal coverage" if not coupled with other changes, according to the analysis.

Public plans, meanwhile, would "offer the greatest potential for automatic and continuous enrollment and the ability to cover everyone" and move the health care system toward high performance, the report said. However, such plans would create dislocation and be financed largely by "federal income and payroll taxes or new taxes, such as a value-added tax or consumption tax."

Dallas Salisbury, president and CEO of the Employee Benefit Research Institute and chairman of the Commission's Coverage Workgroup, said "The most important takeaway of this report is that universal coverage is essential to improve access, quality, equity, and efficiency in the U.S. health care system."

By John Reichard, CQ HealthBeat Editor

October 17, 2007 -- Senate Finance Committee members met Wednesday to discuss a Medicare package that could include payment cuts to Medicare Advantage plans and prevent a scheduled 10 percent payment cut to Medicare physicians, among other provisions.

The package under consideration could include cuts as large as $30 billion to pay for the physician payment fix and other provisions, but at least one senator said it's unclear whether offsets can be found to finance a package that large. Also up in the air is whether the physician payment fix would be one or two years because of the offset issue.

Senators emerging from the meeting on Medicare, tax, and trade issues emphasized that the discussion was general but said Committee Chairman Max Baucus, D-Mont., would like to mark up the Medicare provisions this month.

However, the committee appears to have a ways to go before any markup can occur.

"They'd like to do that, but I think maybe they're dreaming," said Sen. Trent Lott, R-Miss. There were "no final decisions, we're just exchanging ideas at this point."

Although Medicare Advantage cuts are on the table, there appears to be considerable resistance on the committee to cutting deeply. Oregon Republican Gordon H. Smith characterized the discussion of Medicare Advantage cuts as "stalled."

"There may be some trimming but the general proposition is Medicare Advantage has taken hold, and it is the basis by which rural people get Medicare," Smith said.

Washington Democratic Maria Cantwell said the panel is considering cuts to private fee-for-service plans in Medicare Advantage. "I think people are trying to see if that's where we want to go," she said, and added "the [private] fee-for-service area is a good place to look at."

However, Utah Republican Orrin G. Hatch said that he doesn't think the panel has to cut those plans, but added that he does expect some Medicare Advantage cuts.

Lobbyists estimate the cost of blocking projected payment cuts to doctors for two years at about $20 billion, and believe that Baucus is looking at various other Medicare provisions, such as adding payments for rural hospitals and rural home health agencies, extending exemption provisions to existing caps on payments for rehabilitation therapy, and possibly provisions to make it easier to qualify for subsidies to low-income Americans for Medicare prescription drug coverage.

But Smith said it may be difficult to find the offsets to pay for those provisions, including a two-year doctor payment fix. Michigan Democrat Debbie Stabenow agreed: "It's one or two [years,], depending on how much we can raise to offset."

However, without sizeable cuts to Medicare Advantage, it's unclear where the money would come from for a two-year physician payment fix. Asked whether there was discussion of cuts to other providers, such as home health agencies and skilled nursing facilities, Smith said "the only thing I've heard mentioned is oxygen," referring to payments for oxygen equipment for those with respiratory difficulties.

Baucus also may have another "pay-for" challenge—paying for a resolution he plans to introduce that would overturn a July 30 "National Coverage Determination" by the Centers for Medicare and Medicaid Services limiting payments for higher dosage levels of erythropoiesis-stimulating agents (ESAs) used to treat anemia in cancer chemotherapy patients.

Lobbyists say the five-year cost of overturning that decision would be about $2 billion, according to an unpublished Congressional Budget Office estimate. Consumer groups have urged Congress to resist pressure by oncologists, hematologists, and the manufacturers of ESAs to overturn the July 30 decision, and the Food and Drug Administration has issued a letter saying the order is generally consistent with the scientific literature.

But a Baucus aide said the Montana Democrat sees the dosage issue as one that can be safely handled by physicians. "Doctors need to be able to treat their patients," the Baucus aide said.