Posts Tagged ‘House of Representatives’

Senate Passes Bill to Fund the FDA

Wednesday, June 6th, 2012

In a rare show of bipartisanship, the Senate voted 96 – 1 to fund the Food and Drug Administration (FDA), a regulatory powerhouse with far-reaching influence over the foods Americans eat and the medicines they take.  The bill’s goal is to speed approval of new drugs and devices and ensure food safety.  It reauthorizes fees from companies like Johnson & Johnson, Medtronic, Inc. and Roche Holding AG that facilitate FDA evaluation of new medical products prior to approval.

These user fees could provide approximately 50 percent of the FDA’s proposed $4.5 billion budget for 2013.  The FDA regulates products that make up nearly 25 percent of the American economy.  Similar legislation has passed a House committee with support from both sides of the aisle and may move to the full House for a vote quickly.  Senate leaders sped the bill through the chamber, emphasizing its importance in protecting consumer safety and promoting innovation in medicine.

“This bill is a shining example of what we can achieve when we all work together,” said Senator Tom Harkin (D-IA), who chairs the Senate committee that oversees the FDA.  Industry user fees, first enacted in 1992, give the FDA millions of dollars annually to review new products for the American market but must be renewed every five years.  The current version will expire in September.  Additionally, for the first time the FDA will also collect fees from makers of generic drugs and of copycat versions of complex biotech drugs, known as biosimilars.  “We’ve worked on this bill for 18 months,” Harkin said as he and ranking member Mike Enzi (R-WY) refereed the mostly cordial debate.  The two led opposition to all of the amendments that came up for a vote, and all were defeated.

Senator John McCain (R-AZ) proposed an amendment that would let Americans import drugs from approved Canadian pharmacies.  “In a normal world, this would require a voice vote,” McCain said.  “But what we’re about to see is the incredible influence of special interests here, particularly (the Pharmaceutical Manufacturers Association).”  Senator Robert Menendez (D-NJ) argued that it’s not about the special interests.  “It’s about the health and security of the American people, which is why time after time the Senate has rejected it,” Menendez said.

Senator Bernie Sanders (I-VT), who cast the sole “no” vote, got a vote on his amendment to take away exclusive marketing rights from drug makers if a company is found to be at fault for fraud involving a particular drug. The measure failed overwhelmingly, 9-88.  “Almost every drug company in this country is perpetrating fraud,” Sanders said.  “They’re ripping off Medicare; they’re ripping off Medicaid; and they’re ripping off the American consumer.”

The bill’s speedy passage surprised onlookers accustomed to the usual congressional gridlock.  “I haven’t seen anything move this fast in a long time,” said Lisa Swirsky, a senior policy analyst at Consumers Union.  “Congress is actually working.  It’s kind of like you learned about it in high school.”  Nevertheless, consumer advocates have mixed feelings about the Senate bill that now goes to the House.  “If you look back at what we saw in the House in December, you know this could have been a lot worse,” Swirsky said. She noted that she was “deeply disappointed” that some provisions consumer groups were pursuing to toughen FDA’s review of medical devices did not make it into the bill.  “I would say it’s bittersweet but mostly bitter.”

For more than seven decades, the FDA has primarily inspected U.S. factories.  In recent years, pharmaceutical companies have moved their operations overseas to take advantage of cheaper labor and materials.  Between 2001 and 2008 the number of American drugs made overseas doubled, according FDA figures.  Today approximately 80 percent of the ingredients used in U.S. medicines are made in other countries.

The Senate bill will end a requirement that the FDA inspect all American factories every two years, and give the agency increased discretion to focus on foreign facilities.  At present, the FDA inspects the typical foreign manufacturing facility once every nine years.  Under the bill,  FDA inspectors will target the most problematic manufacturing sites, no matter where they are located.  “This puts domestic and international facilities on an even playing field for the first time,” said Allen Coukell of the Pew Charitable Trusts, which has advocated for increased drug safety.  “It says to FDA, ‘you should inspect the highest risk facilities first, no matter where they are in the world.’”

“These are all the steps American families already think we have in place to protect them,” said Senator Michael Bennet, (D-CO), one of the bill’s authors.  “I cannot tell you how many town halls I have had where people have been shocked to learn that the products they have in their medicine cabinets have never been inspected.”

Sebelius Asks Civil Right Activists to Defend the ACA

Monday, April 23rd, 2012

Secretary of Health and Human Services Kathleen Sebelius has asked civil rights activists to help defend the Patient Protection and Affordable Care Act (ACA), noting that the healthcare law faces an “enemy” whose goal is to set American health policy back half a century.  The remarks come two months before the Supreme Court is expected to issue a ruling that could strike down the law.

Sebelius described the ACA as an crucial weapon against racial disparities that have long meant higher infant mortality rates, shorter life spans and limited access to medical services for minorities.  “The enemy is at the door and we know that they would like to dismantle these initiatives,” Sebelius told the annual convention of the National Action Network, a civil rights group led by the Reverend Al Sharpton“Healthcare inequalities have been one of the most persistent forms of injustice,” she said. “Now is not the time to turn back.”

Civil rights advocates and the minorities they often represent form a key segment of the Democratic base, especially if the Supreme Court strikes down Obama’s signature domestic policy achievement.  Research shows that low-income Americans, including many minorities, have significantly less access to medical care and suffer higher rates of childhood illnesses, hypertension, heart disease, AIDS and other diseases.

Designed to bring healthcare coverage to more than 30 million uninsured Americans, the ACA has become a pet target for Republicans mainly because of an `individual mandate that requires most Americans to have healthcare insurance by 2014.  “We’ve got folks who are committed to undoing…the important initiatives that we’ve made in the last few years,” Sebelius said.  “Frankly, they want to go back and undo Medicare and Medicaid from the mid-1960s.  They want to roll us back years and years.”

The House of Representatives voted recently to partially privatize Medicare and convert Medicaid to a block-grant program for states, although the legislation is likely to be stalled in the Senate.  “I’m here to ask you to help,” Sebelius said.  “If we can begin to close the disparities in health, we begin to close disparities in other areas, too.”

Sebelius asked religious leaders, health advocates and other minority leaders to help the Obama administration educate the public about the healthcare law’s many benefits. The law, which becomes fully effective on January 1, 2014, has already benefited minorities by extending private insurance coverage to young adults, providing free preventive services for those with insurance and prohibiting coverage denials for children with pre-existing conditions.

Super Committee’s Failure Raises Questions About Healthcare Funding

Wednesday, December 7th, 2011

Now that the Super Committee has failed to identify $1.2 trillion in cuts from the federal budget, automatic cuts totaling billions for everything from Medicare to biomedical research, start in 2013.  Some healthcare sectors will fare better than others.  The primary health entitlement programs, Medicare and Medicaid, are protected under the law that created the Super Committee.  Automatic cuts will not impact Medicaid, the joint federal-state health program for the poor.  Medicare would be cut by two percent – all from payments to hospitals and other providers.

The bad news is that unless Congress reworks the legislation mandating the automatic cuts, a series of across-the-board reductions will begin in 2013.  The House and Senate appropriations committees must decide how to spread the cuts among various programs.  And some of the larger, better-financed lobbies may be able to influence what is cut and what is kept.

Even though the Medicare cuts are limited to hospitals and other medical providers and would not exceed two percent, they argue that is too much and that they sacrificed plenty in the Patient Protection and Affordable Care Act (ACA).  Rich Umbdenstock, president and CEO of the American Hospital Association, said sweeping cuts would hurt Medicare beneficiaries and their families and “also have an impact on the ability of hospitals to provide essential public services to the communities they serve given the impact that Medicare has on the entire healthcare system.”

Officially known as the Joint Select Committee on Deficit Reduction, the Super Committee was unable to meet its deadline to come up with $1.2 trillion of deficit reduction required by the law that created it, much less the $4 trillion that deficit hawks said was necessary to stabilize the finances of the U.S. government, whose debt has topped $15 trillion.  The failure ensures that the fiscal debate between Democrats who want to protect social programs and increase revenue by raising taxes on the wealthy; and Republicans who want smaller government and have pledged to reject tax increases will be a fundamental choice confronting voters in 2012.

“After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline,” Representative Jeb Hensarling,(R-TX), and Senator Patty Murray, (D-WA) said.  The co-chairs thanked committee members, staffers and “the American people for sharing thoughts and ideas and for providing support and good will as we worked to accomplish this difficult task.”

Writing for Politico, David Nather speculates on whether the Super Committee’s failure has harmed efforts to reform Medicare and Medicaid.  It would be easy to conclude that the Super Committee’s failure means the big, expensive health care entitlement programs — Medicare and Medicaid — are untouchable.  It also would be wrong.  The timing was off, coming too close to a presidential election.  The co-chairs weren’t powerful enough.  The work came too soon after a summer debt deal that Democrats hated.  Republicans couldn’t give the kind of concessions on taxes that Democrats needed.  And the alternative to a Super Committee deal on healthcare entitlements — the two percent automatic cuts in healthcare payments and defense funding that will now take place in 2013 — wasn’t harsh enough to force a deal on Medicare and Medicaid. In fact, it might even have been the easier way out.  All of which means Medicare and Medicaid are not off the table forever.”

The Hill’s Sam Baker offers a different perspective. “The Super Committee’s demise is a mixed bag for the American Medical Association and other groups that wanted the 12-member panel to tackle Medicare’s payment formula, known as the sustainable growth rate (SGR).  The AMA — with bipartisan support in Congress — pushed hard for the supercommittee to include in its deficit-cutting package a long-term fix to the SGR.  The formula calls for automatic annual cuts in doctors’ payments, which add up as Congress consistently delays each cut from taking effect.  Aspirations of a long-term SGR patch should be put to rest, healthcare lobbyists said. But they questioned whether the supercommittee push was ever realistic, because an SGR fix would add to the deficit.”

“I never once believed that the Joint Select Committee would be the one to do that,” said Julius Hobson, a senior adviser at the Washington, D.C.-based law firm Polsinelli Shughart and a former AMA official.

Medicare Changes Would Hit Lower-Income Seniors Hard

Tuesday, August 2nd, 2011

At a time when concern about federal deficits and the national debt are growing,  few quarrel with the need to reform Medicare.  The health insurance program for seniors and people with certain disabilities accounts for 15 percent of the federal budget – in third place behind Social Security and defense spending.  That share is rising as healthcare costs continue to rise and more baby boomers retire, threatening the program’s long-term solvency.

Several of the most prominent solutions under discussion largely derive their savings by shifting a greater share of the cost onto beneficiaries.  The plan sponsored by Representative Paul Ryan (R-WI) and passed by the House of Representatives would significantly cut Medicare spending by capping the government’s contribution to the program and transforming it into a system of “premium supports” given to seniors to help subsidize their purchase of private insurance plans, with seniors paying additional costs.  This would double out-of-pocket spending by the average senior to $12,500 each year, according to Congressional Budget Office estimates.

The ability of a majority of seniors to shoulder that burden appears dubious.  Just five percent of Medicare beneficiaries make $80,000 or more, a figure that includes any income from a spouse. For the 47 percent of seniors who are at or close to poverty, on average they are already spending nearly 25 percent of their budgets on healthcare, according to an analysis by the Kaiser Family Foundation.

“There’s this impression that there’s a great deal of wealth among the Medicare population, this image of wealthy seniors playing golf and enjoying their retirement years,” said Tricia Neuman, director of the Kaiser Family Foundation’s Medicare Policy Project.“But while some are lucky to do so, many are living on a fixed income, struggling to make ends meet…with really limited capacity to absorb rising costs.”

According to the Kaiser Family Foundation’s report, raising Medicare’s eligibility to 67 in 2014 would generate an estimated $5.7 billion in net savings to the federal government, but also result in an estimated net increase of $3.7 billion in out-of-pocket costs for 65- and 66-year-olds, and $4.5 billion in employer retiree healthcare costs.  In addition, the study projects that the change would raise premiums by about three percent both for those who remain on Medicare and for those who obtain coverage through health reform’s new insurance exchanges.  The study assumes both full implementation of the health reform law and the higher eligibility age in 2014 in order to estimate the full effect of both the law and the policy proposal.  In the absence of the health reform law, raising Medicare’s age of eligibility would result in an increase in the uninsured, according to other studies, as many older Americans would have difficulty finding affordable coverage in the individual market in the absence of Medicare.  With health reform, virtually all 65- and 66-year-olds would be expected to obtain alternative sources of coverage.”

Healthcare remains a major focus of budget talks on Capitol Hill,Senator Mark Kirk (R-IL) recently told the American College of Surgeons (ACS).  Every group that relies on federal funding should expect a 10 to 20 percent drop in that funding.  When Dr. L.D. Britt, president of the ACS, warned that such cuts could send some healthcare providers into a “tailspin,” Kirk responded that “the tailspin is the U.S. economy.  There is a new audience at play,” Kirk said, referring to U.S. creditors.  “The judgments they render, they are swift and severe.”  Kirk is optimistic that a solution to the country’s debt-ceiling dilemma “will have a way of concluding itself one day before the August 2 deadline.”

Polls: Most Americans Oppose Changes to Medicare

Tuesday, June 28th, 2011

Americans have mixed feelings about what changes should be made to the popular Medicare program. Although 53 percent say the program needs fundamental changes, 58 percent say it is working fine the way it is.  Americans were asked to decide which of three statements is closest to their viewpoints: “Medicare works pretty well and only minor changes are necessary to make it work better”; “There are some good things about Medicare, but fundamental changes are needed”; or “Medicare has so much wrong with it that we need to completely rebuild it.”

Twenty-seven percent – including 36 percent of Democrats – believe that only minor changes are needed.  Another 13 percent said the program needs to be completely rebuilt.  Fully 53 percent said Medicare needs fundamental changes — even though the program has many good points.  People who want basic changes include a majority of Republicans and independents, though just 43 percent of Democrats support the plan.  A majority of Americans between ages 18 and 64 want significant changes.  Just 37 percent of those 65 and older agree.

Additionally, respondents were asked if they wanted to see Medicare “continue the way it is set up now, as a program that pays the doctors and hospitals that treat senior citizens” or “if they think it should be transformed into “a program that gives senior citizens payments towards the purchase of private insurance.”  Democrats want to retain Medicare in its present form; Republicans want to transform it into a voucher system in which seniors choose their coverage and are given money to cover their insurance premiums.

So strongly does the Senate Democratic leadership feel,  they have reaffirmed that Medicare cuts should not be on the table during the debt ceiling discussions.  “Seniors can’t afford it,” Senate Majority Leader Harry Reid (D-NV) said.  “The vast majority of the American people, including most Republicans, do not support changing Medicare as we know it, as articulated in that piece of legislation that came from the House.  That” piece of legislation is the Paul Ryan (R-WI) plan, “The Path to Prosperity”, which slashes the budget deficit by about $5 trillion over the next decade.

Ryan’s plan would overturn the Patient Protection and Affordable Care Act (ACA) and proposes major reforms to Medicaid and Medicare.  Medicaid would become a block grant system; the federal government would allocate money to states, giving them greater flexibility to shape their healthcare programs that serve the poor.  Currently, the government matches every dollar that states spend on Medicaid; the formula varies from state to state.

Senator Charles Schumer (D-NY) said Democrats will not accept a “mini” Ryan plan.  “The Ryan plan to end Medicare as we know it must be taken off the table, but Republicans should know that we will not support any mini version plan of ‘Ryan’ either,” Schumer said.  “We want to make our position on Medicare perfectly clear.  No matter what we do in these debt-limit talks, we must preserve the program in its current form, and we will not allow cuts to seniors’ benefits.“

Slashing Medicare will be a major issue in the 2012 election. According to Harvard political scientist and pollster Robert Blendon, “Older Americans tend to vote at much higher rates than other voters,” he said.  “They are the group that most care about healthcare as a voting issue.”

“Medicare for us is a pillar of health and economic security for our seniors,” said Representative Nancy Pelosi (D-CA), who is the House Minority Leader.  “It’s an ethic, it’s a value…and we intend to fight for it.  Pelosi is well aware that there is a problem with Medicare and acknowledges that the program is not financially sound enough to support the retirement of 78 million baby boomers who are joining the program.  Additionally, she knows that Medicare costs strongly impact the nation’s debt and deficit problem.  Additionally, she says that she prefers not to use Medicare as a weapon against Republicans.  “Would you rather have success with the issue, or would you rather have a fight in the election?  Of course you’d rather have success,” she said.  “That’s what you came here to do.  That’s what’s important to the well-being of the American people.”

Another recent poll, conducted by the Pew Research Center found that older Americans do not have a favorable opinion about privatizing Medicare.  Fifty-one percent of people aged 50 and over oppose the plan, while just 29 percent support it.  Even among Republicans, more respondents oppose the plan than support it.  The changes are designed to save the program’s finances by trimming government benefits for all Americans under the age of 55.  Medicare says it will run out of funds to pay full benefits by 2024.  One person polled is Michael A. Smith, a 54-year-old lifelong Republican who is currently unemployed and lives in the Philadelphia suburbs.  “A community like this, they want jobs and no changes in the funds they’ve paid into all their lives,” Smith said.

The nonpartisan Congressional Budget Office has stated that Ryan’s plan would not allow insurers to charge sick people more than healthy ones. Insurance companies would set premiums at the same level for everyone of the same age.  Although Ryan’s plan would leave Medicare intact for anyone now 55 or older, Jack Pitney, a political science professor at Claremont McKenna College in Claremont, CA, said older voters have a hard time believing that.  “Anytime you say, `But this doesn’t affect current senior citizens,’ they think it’s going to affect them,” he said.  “Seniors are very, very sophisticated when it comes to these programs.  They figure any change could have a loophole or an exception or a provision that could end up hurting them after all.  They’re very zealous about safeguarding the programs from which they benefit.”

Capitol Hill Kabuki

Thursday, June 23rd, 2011

Five Senators want to take the House-passed Medicare plan off the table in bipartisan deficit reduction talks, claiming that the plan effectively dismantles the program.  According to the Senators, the Medicare plan, which passed as part of a budget proposal in April, would jeopardize senior citizens’ current benefits and double out-of-pocket costs.  The five are Senator Ben Cardin (D-MD); Senator Sherrod Brown (D-OH); Senator Bill Nelson, (D-FL); Senator Claire McCaskill, (D-MO); and Senator Jon Tester, (D-MT).

In a letter to Vice President Joe Biden, the senators wrote:  “We are aware the administration has rejected this proposal since its passage by the House, and we applaud your efforts to educate the American people about its serious implications.  We encourage you to remain unwavering in opposition to this scheme.  For the good of the nation’s seniors, it must remain off the table.”

According to the letter,“This proposal would never pass Congress on its own, and it does not belong in a larger deal either.  It would be devastating for America’s seniors, who would see their out-of-pocket costs for healthcare double and the benefits they currently enjoy jeopardized.  Under this risky proposal, insurance company bureaucrats would decide what seniors get.”  Biden is leading talks to raise the debt ceiling and negotiating with lawmakers regarding ways to reduce the deficit as a trade-off to raise the debt ceiling.

The deficit and debt limit – whose ceiling the nation is rapidly approaching – are part of the conversation on Capitol Hill.  “I’m willing.  I’m ready. It is time to have the conversation” about deficit cuts and the debt limit, said House Speaker John Boehner

(R-OH), urging President Barack Obama to involve himself personally.  “It is time to play large ball, not small ball.”  House Democratic leader Representative Nancy Pelosi (D-CA) said, “I could never support any arrangement that reduced benefits for Medicare.  Absolutely not,” she said,” emphasizing a position she and other Democrats had laid out at their own meeting with the president.   Given Medicare’s size — nearly $500 billion a year — any deal on cutting future deficits is likely to include savings from the program, and may include the benefit cuts that most Democrats oppose.

The Obama administration has come out against the Medicare reforms in the House plan –  authored by House Budget Committee Chairman Paul Ryan (R-WI).  The Senators insist that this is a non starter, and stressed that they must not be a point of negotiation during the ongoing debt ceiling talks.  Despite the Democrats’ opposition, Senate Minority Leader Mitch McConnell (R-KY) insists that the Medicare reform plan will be “on the table” in negotiations.  “We are going to discuss what ought to be done,” McConnell said.  “I can assure you that to get my vote to raise the debt ceiling, for whatever that is worth…Medicare will be a part of it.”

Some Republicans are backing away from Ryan’s proposal.  For example, presidential candidate Newt Gingrich had egg on his face after suggesting that the plan is “radical… right-wing social engineering,” Gingrich’s explanations proved too little, too late for many conservatives, who continue to hammer the former House speaker for his gaffe.

In an op-ed piece for the San Francisco Sentinel,  Chrystia Freeland writes that “The political theater in the United States this week has been all about the ‘debt ceiling’:  Congress voting not to increase it; President Barack Obama and the House Republicans are meeting to discuss it; and the Treasury warning that failure to raise it will bring economic apocalypse for the United States and the world.  Elites like to accuse ordinary Americans of a lack of political sophistication, but everyone from Main Street to Wall Street is savvy enough to understand that so far, the fighting over the ceiling is pure Kabuki.  As with the budget deal earlier this year, the real negotiating is unlikely to happen until the very last minute.  But everyone also understands that this summer game of brinkmanship matters because it is a proxy war being fought over a very real problem:  the growing national debt and deficit.  At just under 60 percent of gross domestic product, the U.S. national debt is lower than that of France, Germany and Britain.  And the rest of the world still seems delighted to lend the United States money on historically generous terms.”

Medicare Likely Safe From GOP Budget Cutters

Tuesday, May 24th, 2011

America’s senior citizens can breathe a sigh of relief.  Even as the majority Republicans in the House of Representatives wield a surgeon’s scalpel to slash spending from the federal budget, they are unlikely to succeed at making significant changes to the extremely popular Medicare program. The Democratic-controlled Senate rejected serious cuts in the proposed legislation, which also included an attempt to block implementation of the Patient Protection and Affordable Care Act.  Congressional Democrats and the Obama Administration pointed out that the Republican budget measure’s block on implementation funding would endanger short-term funding for Medicare.

The legislation would create “significant disruptions in services” to Medicare recipients, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius wrote to Senator Max Baucus (D-MT).  The payment delays, Sebelius wrote, would halt the need to undertake a lengthy process to issue new regulations governing Medicare Advantage payment rates since the Patient Protection and Affordable Care Act (ACA) put in place its own set of payment rate rules.  The Congressional Budget Office’s (CBO) analysis questioned that claim because it believes that the Republican bill will reduce spending by $1.6 billion through the rest of 2011.  Democrats maintain that the CBO’s review of Medicare spending is a separate issue from HHS’s lawful authority to fund the program.

Despite the Senate Democrats’ united front, House Budget Committee Chairman Paul Ryan (R-WI) is “ready to take on health programs” as legislators on both sides of the aisle struggle with long-term spending concerns.  Lawmakers continue talks regarding the current year spending measure still under consideration.  A new continuing resolution that would fund government operations until April 8 has emerged.  Though it includes deeper spending cuts, it is free of controversial riders such as language to restrict ACA implementation funds.  Meanwhile, the CBO issued a report that legislation designed to further the defunding goal would add $5.7 billion to the deficit.

Democratic leaders insisted that some form of compromise by the House GOP members is now needed. “We’re looking for some give on the Republican side,” said Sen. Charles Schumer (D-NY).  Speaker of the House John Boehner (R-OH), he said, “needs something to bring his freshmen into the real world.”  Boehner, referencing the Democrats and the White House, said “I hope the talks are going to continue, but we are not going to get very far if they don’t get serious about doing what the American people expect of us.  “This is not going to be easy.  Our goal, as I’ve said many times, is to cut spending and keep the government open.”

Battle About Medicaid Block Grants Brewing in Congress

Wednesday, May 11th, 2011

Mississippi Governor – and possible presidential hopeful — Haley Barbour and other Republican governors recently demanded that Medicaid, the state-federal health program that covers 50 million poor and disabled, be transformed into block grants.  House Republicans have vowed to tackle expensive programs like Medicaid to cut federal spending.  Any attempt to turn Medicaid into block grants – federal lump-sum payments to states – raises many questions.  Democrats argue that a move of this type could result in loss of healthcare coverage for millions who are poor, sick and old.

Representative Fred Upton (R-MI), chairman of the House Energy and Commerce Health Subcommittee said to expect House bills on the Medicaid program’s maintenance-of-effort requirement and block grant funding to states.  Because Medicaid is an entitlement program, all Americans who are eligible are guaranteed coverage.  The federal government, which foots the bill for approximately 60 percent of Medicaid’s cost, is committed to helping the  states cover costs; in return, it requires them to cover certain groups of people and provide specific benefits.  For example, children, pregnant women who meet explicit income criteria and parents with dependent children must be given coverage.

“The governors have requested flexibility in the way they serve Medicaid patients,” Representative Joseph Pitts (R-PA), the Health Subcommittee’s chairman said.  “They maintain they can provide the service better and cheaper, so we’re looking to give them that flexibility and change this maintenance-of-effort provision.  I won’t be specific on the block grants, but we’re having discussions with governors.”  Pitts’ comments followed a Health Subcommittee hearing in which HHS Secretary Kathleen Sebelius answered extensive questions about the Obama administration’s fiscal 2012 budget and the Patient Protection and Affordable Care Act.

Why are the block grants important?  When the new healthcare law goes into full effect in 2014, approximately 16 million additional people will become eligible for Medicaid.  The debate, which cuts to the heart of the social contract between the government and its citizens, has implications for the other large entitlement programs — Social Security and Medicare.  In 2010, the federal government spent $1.5 trillion on those programs, or approximately 43 percent of the federal budget, according to the Congressional Budget Office.  Speaker of the House John Boehner (R-OH) said House Republicans’ upcoming budget proposal would cut Social Security and Medicare, despite the political risk of taking on such popular programs.  Democrats are skeptical.  Changing Medicaid into a block grant means “you have no guarantee that people who are now covered will continue to be covered, or whether (the states) will simply cut back on their Medicaid program,” said Representative Henry Waxman, (D-CA), who is a primary defender of the program.

Ben Cutler: An Insurance Industry CEO Responds to Healthcare Reform

Tuesday, April 26th, 2011

Is the healthcare insurance industry the scapegoat for rising premiums?  In the inaugural episode of the Chuck Lauer Show,  presented by Alter+Care, the former publisher of Modern Healthcare Magazine talked about the insurance industry’s take on healthcare reform with Ben Cutler, Chairman and CEO of USHEALTH Group, Inc., who previously led Fortis Healthcare.  Cutler currently serves on AHIP’s Executive Committee, serves on AHIP’s Board and is also the Chairman of AHIP’s Membership Committee.  The Chuck Lauer Show is an ongoing conversation about the future of healthcare with the leaders and thinkers who are shaping a new direction for healthcare in the United States. 

Cutler, who has spent more than 30 years in the healthcare insurance industry, recalled the ongoing national debate that began nearly 20 years over HillaryCare with the objective of how to provide universal coverage for the more than 50 million uninsured Americans.  Cutler believes that the Obama administration has chosen to focus on access and doesn’t sufficiently address affordability issues.  Healthcare industry groups recognized that the day would come when reform would be a top-line issue and that we would not be well served by just saying “no”.  Cutler says “We’ve worked hard on positioning the industry to accommodate reforms and tried to be very accommodating because getting more people covered is a laudable objective.”

As the healthcare reform bill was drafted, it soon became clear that the insurance industry would have a problem with some of the issues.  Unfortunately, according to Cutler, the politicians decided they needed an enemy and “that turned out to be us.  We continue to be vilified as an industry”, a situation that could – and should — have been avoided.  The Patient Protection and Affordable Care Act will have some unintended consequences in terms of how the legislation will affect the behavior of various stakeholders who comprise the healthcare economy – consumers, providers, insurers, regulators, etc.  It is inevitable that the insurance industry will have to raise rates if they are to comply with the healthcare law, which essentially constitutes a new tax on the American people.

Cutler cites the example of the $5 billion set aside to subsidize people in high-risk pools.  The government estimated that by this time, upwards of 500,000 individuals would be enrolled in these pools.  So far, just 8,000 people have signed up, an example of where government expectations were totally unrealistic.  Additionally, there is the issue of pre-existing conditions, which the government has characterized as an industry-abusive position, and one which relates to affordability of coverage.  According to Cutler, if people buy homeowners’ insurance only after their house catches fire, the premium obviously would be higher.

Affordable Care Act Under Siege As It Celebrates Its 1st Birthday

Wednesday, March 30th, 2011

As the Patient Protection and Affordable Care Act (ACA) celebrates its first birthday, the future of the law is still unclear, but its effects have been enormous.  The debate over the law likely created the “tea party” movement.  Last November, Republicans took control of the House of Representatives and strengthened their numbers in the Senate.  Potential contenders for the 2012 Republican presidential nomination need only say one word, “Obamacare,” to get a negative reaction from a crowd.  President Obama at times himself has struggled to ensure that his first term isn’t defined solely by this legislation.

Public opinion over the ACA remains divided, despite the efforts of Democrats to showcase how it will provide healthcare insurance to millions of uninsured Americans.  Additionally, most Americans remain confused about what the healthcare overhaul actually accomplishes.  Republicans considering a 2012 presidential race for the most part stand united in their opposition to the legislation.  Former Minnesota Governor Tim Pawlenty is using his opposition to the law to gain a national following.  “If courts do not do so first, as president, I would support the immediate repeal of Obamacare and replace it with market-based healthcare reforms,” Pawlenty said.  Former Massachusetts Governor Mitt Romney is in a different position because he supported a similar law during his tenure.

Representative Steve King (R-IA), the Iowa Congressman who is in the vanguard to repeal the ACA, says that “America will never become the nation it can be if were saddled with Obamacare“, “I have a deep conviction that this is unconstitutional, that this is unsustainable, and I have a duty.  And that doesn’t mean I sit back and wait for the Supreme Court to save America from itself.  It’s my job to step up and lead.”

Taking a difference stance, Carmela Coyle, president and chief executive of the Maryland Hospital Association, said her group strongly supports the reform law and will work to assure that the effort translates into better and cost-effective care.  “We support healthcare reform because hospitals see every day what happens when patients don’t have the healthcare coverage they need and can’t get their care at the right time and in the right setting.  Expanding coverage was necessary, and it was right.  We must ensure that the health coverage now guaranteed to many Marylanders is meaningful coverage.”

What’s the future of the Affordable Care Act? House Republicans, who say the law gives the federal government too much control and doesn’t cut costs, passed a repeal bill after they became the majority in January.  Full repeal is unlikely unless Republicans successfully take control of the Senate and the presidency in the 2012 presidential elections.  The current Democratic-led Senate will not vote to repeal and President Obama would certainly veto a repeal bill.  Democrats argue the law’s reforms will slow the growth of healthcare costs while improving care and reducing the ranks of the uninsured.  Republican efforts to withhold funds to block the law’s implementation will be DOA in the Senate.  That leaves Republicans the option of picking apart the law regulation by regulation, a strategy that could prove more successful.

In the meantime, implementation is underway.  “As we look forward with implementation of the health reform law, the states really become the focus now,” said Jennifer Tolbert, a principal policy analyst at the Kaiser Family Foundation.  “When thinking about the coverage expansions in particular because it is going to be up to the states to implement the expansion of the Medicaid program for lower-income individuals and to create the new health-insurance exchanges that will provide access to private insurance for moderate and middle income individuals.”