Posts Tagged ‘Vice President Joe Biden’

Non-Profit Hospitals Will Take Financial Hit If the Individual Mandate is Struck Down

Monday, May 14th, 2012

If the Supreme Court overturns the individual mandate that requires Americans to buy healthcare insurance that is contained in the Patient Protection and Affordable Care Act (ACA), non-profit hospitals will struggle with higher costs, according to Moody’s Investors Service.  The individual mandate has become the focus for legal attacks on the healthcare law.  It “would result in a significant reduction in uncompensated care delivered by hospitals” and reduce “utilization of expensive emergency room services,” the rating agency said.

“If the Supreme Court overturns the individual mandate, the private health insurance market would likely weaken under the unbalanced weight of strict provisions to cover all those who seek insurance without the counterbalancing benefit of a new, largely healthy, population segment that would be provided under the mandate,” Moody’s said.  “This scenario could become untenable for many insurers and hospitals, as costs would rise but revenues would not.”

There are additional challenges to non-profit hospitals in the ACA, specifically cuts in reimbursement rates for Medicare and reduction of funds paid to hospitals that serve a disproportionate share of Medicaid recipients, Moody’s said.  “Removing the mandate would make the negative features of reform loom much larger.”  Moody’s said the federal government could turn to a voucher system in which individuals would receive public help for them to buy health insurance, but the results for non-profits hospitals “would be more complex and hard to foresee.”

This is bad news because by a nearly five-to-one margin, hospitals expect the ACA to shrink their revenues. The result suggests that hospital executives are having second thoughts about the deal they made with the Obama administration in exchange for supporting the healthcare overhaul will help them weather the law’s financial repercussions.

According to a recent poll, 55 percent of hospitals and health systems anticipate falling revenues as a result of the law, while 12 percent expect an increase.  Twenty-eight percent were unsure of the law’s effect on revenue, indicating continued concern in the industry over the changes wrought by healthcare reform.  Hospital executives agreed to give up $155 billion in government payments over 10 years in a deal to cap costs borne by the industry as a result of the ACA.  The agreement followed a similar agreement with pharmaceutical companies and enabled the reform.  Two crucial hospital groups — the American Hospital Association and the Federation of American Hospitals — backed the law.  “Hospitals have acknowledged that significant healthcare savings can be achieved by improving efficiencies, realigning incentives to emphasize quality care instead of quantity of procedures,” Vice President Joe Biden said at the time.  “Today’s announcement, I believe, represents the essential role hospitals play in making reform a reality.”

“Hospital and health systems’ financial health has a direct impact on the benefits offered to their employees,” said Maureen Cotter, a senior principal at HighRoads, which took the poll.   “Even though 70 percent of those surveyed stated that they are committed to providing coverage in the long term, and no organizations have plans to discontinue coverage now or in the future, the coverage provided may take a new shape,” Cotter said.

There’s even more bad news in the fact that Howard Dean, a physician who formerly was chairman of the Democratic National Committee, a 2004 presidential candidate and governor of Vermont thinks that the high court will declare the mandate unconstitutional.  Dean believes that Justice Anthony Kennedy’s swing vote will side with the conservative justices when it comes to the individual mandate.  “I do believe that it’s likely the individual mandate will be declared unconstitutional.  Kennedy will probably side with the four right-wing justices. The question is going to be, is this individual mandate question, can that be considered separately from the rest of the bill?  And I think it will be.”

Dean also said the ACA can remain in place without the mandate.  “It’s definitely not necessary for the bill to succeed,” Dean said.  “It was mainly put in by academics who built the program for Governor Romney in Massachusetts, they had did it there, and for insurance companies who will benefit from extra customers.”

According to Dean, “The number of so-called free riders — people who will refuse to get insurance until they get sick — is going to be very, very small.”  Dean noted that the actual benefit of the individual mandate is “relatively small.  Everyone is a libertarian in America, whether Democratic, Republican or independent.  They don’t like to be told what to do by government.”

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.”