OCTOBER 28, 2005 -- The House Energy and Commerce Committee approved early Friday morning its budget package designed to cut about $9.5 billion from Medicaid over five years, after Republicans rejected Democratic proposals to trim Medicare instead.
Chairman Joe L. Barton, R-Texas, hinted, however, that Medicare cuts will be on the table during any conference negotiations with the Senate.
The committee voted 28–22 to adopt the package as amended and agreed to send the package to the Budget Committee by voice vote.
His comments offered the first inkling that House members might be open to provisions in the Senate's budget package aimed at carving billions of dollars from Medicare, the federal health insurance program for the elderly and disabled.
The Energy and Commerce package of proposed changes targets Medicaid, the $300 billion state-federal health care program for the poor, to slow the growth of spending. But Democrats want the panel to follow the lead of the Senate Finance Committee, which split its proposed $10 billion in savings between Medicaid and Medicare.
Barton voted against an amendment that would have more closely aligned the House measure with the Finance Committee proposal, but he said, "I'm not dismissing it out of hand."
"It's worthy of a review," the chairman said, noting the idea could be considered in conference later.
Committees in both chambers have been marking up recommendations for savings through fee increases and spending cuts in mandatory programs. The recommendations eventually will be rolled into a single bill in the House.
The Senate Budget Committee has already done that in its chamber, approving Oct. 26 a package that would save a net of $39.1 billion over five years. That draft legislation is expected to be debated on the floor next week.
The bill will need just 51 votes in the Senate, because special budget rules shield it from filibuster. But achieving that majority will not be easy.
To secure the votes of moderate Republicans Olympia J. Snowe of Maine and Gordon H. Smith of Oregon, Finance Chairman Charles E. Grassley, R-Iowa, agreed to divide the cuts his panel produced between the two health entitlement programs.
He also inserted a provision to provide new Medicaid assistance for Hurricane Katrina victims. The bill would include $2.5 billion to reimburse states for providing health care services to those in the path of the storm.
In so doing, he irked some Senate GOP conservatives.
Procedural Fight
In the House Energy and Commerce markup Thursday, Sherrod Brown, D-Ohio, offered an amendment that would have eliminated a fund created by the 2003 Medicare drug law (PL 108-173) to entice health plans to participate in Medicare. The amendment also included a plan to provide higher payments to insurers that cover sicker patients and lower payments to those that enroll healthier patients. Both are elements of the reconciliation package approved by Senate Finance.
Barton moved to rule the amendment out of order, arguing it was not germane to the bill. But the amendment had already been read by the clerk, so Barton had to bring it up for consideration.
Barton asked Brown to withdraw the proposal, saying he "would not support the amendment at any point today," but that it could be debated later.
Brown refused, and his amendment was defeated, 21–27.
The GOP plan for reining in spending would change the way Medicaid pays for prescription drugs, including changing a formula for determining the cost of drugs to take into account factors such as bulk discounts. That and other steps would save $1.2 billion over five years, according to preliminary Congressional Budget Office (CBO) estimates.
Another provision would allow states to raise some Medicaid beneficiaries' cost-sharing over a three-year period from $3 to $5 and allow states to collect co-payments at emergency rooms. These changes would save an estimated $2.6 billion, according to the CBO.
The measure would also put in place stricter guidelines for seniors who transfer assets and then qualify for Medicaid coverage for a five-year savings of $2.3 billion.
A provision that gives states the flexibility to structure their Medicaid coverage more like private health plans would save an estimated $2 billion.
The package of spending cuts has not yet been officially scored, but the CBO estimates a savings of $9.5 billion over five years.
Amendments Shot Down
Democrats offered a series of amendments designed to strip many of the Medicaid changes proposed in the GOP package.
One by Jan Schakowsky, D-Ill., rejected by voice vote, would have deleted a provision that would make seniors with more than $500,000 in home equity ineligible for long-term care provided by Medicaid.
Another, by Ted Strickland of Ohio, defeated 21–26, would have removed language that gives states more flexibility in designing benefits packages.
An amendment by Edward J. Markey of Massachusetts that would have eliminated the entire section of the bill that addresses Medicaid was defeated, 24–30.
A rare break in the GOP ranks came when Rep. Steve Buyer, R-Ind., offered an amendment that would exempt mental health drugs from a provision that allows states to create a formulary that would result in higher costs for non-preferred drugs. Nine Republicans joined 22 Democrats to adopt the amendment, 31–20, over the vehement objections of Barton.