Congress Prepares To Begin Negotiations on Medicaid, Labor-HHS Bill
Congress "will soon plunge into battle over the future of Medicaid," as lawmakers negotiate over Senate and House budget deficit reduction packages, the New York Times reports.
The House proposal (HR 4241) would make "three major changes" to Medicaid, according to the Times. Those changes would allow states to charge premiums and higher copayments for many Medicaid benefits, to reduce benefits and eliminate coverage for some services currently guaranteed under federal law and to end coverage for some beneficiaries who do not pay premiums for at least 60 days. The Congressional Budget Office has estimated that the House bill would cause between 70,000 and 110,000 beneficiaries to lose their coverage because of failure to pay copayments and would affect the coverage of about 17 million beneficiaries.
The Senate budget deficit reduction bill (S 1932) would not alter Medicaid benefits. The Senate bill's "vision of Medicaid is fundamentally different from that in the House bill," and includes a provision to extend coverage to disabled children in families with low and moderate incomes. The House bill would make it easier for states to cut such benefits for families earning more than the poverty level.
House Energy and Commerce Committee Chair Joe Barton (R-Texas) and Senate Finance Committee Chair Chuck Grassley (R-Iowa) are the chief negotiators on Medicaid.
Democrats -- most of whom oppose the House and Senate budget bills -- are not included in the negotiations.
Grassley said the Senate bill's Medicaid proposals are "consistent with the compassionate conservative agenda advanced by the president."
However, Barton said allowing states to increase copayments is needed to "encourage personal responsibility," adding, "Copayments have not changed in 20 years, and they're unenforceable to boot."
Rep. John Dingell (D-Mich.) said the House bill would cause beneficiaries' copayments to "increase much faster than their income," thereby reducing their access to care.
Arkansas Gov. Mike Huckabee (R), chair of the National Governors Association, which drafted a Medicaid plan closely adhered to by the House proposal, said, "We are looking for ways to give at least some benefit to people who have nothing. The only way we can do that is to have a flexible package of benefits" (Pear, New York Times, 12/12).
A coalition financed largely by the American Federation of State, County and Municipal Employees on Monday will introduce television ads criticizing members of Congress who support the House bill. The ad names seven Republican congressional members and says they "voted to cut health care for (their state's) families struggling to make ends meet," adding, "Is it to give billions in tax breaks to the super-rich?"
In addition, religious activists on Wednesday plan to kneel in prayer at the Capitol and be arrested while chanting, "Woe to you legislators of infamous laws ... who refuse justice to the unfortunate" (Weisman, Washington Post, 12/10).
In related news, CBO in a letter to Sen. Charles Schumer (D-N.Y.) said a provision in the Senate bill that would require generic drug makers to give steeper Medicaid rebates would not lead many of the companies to stop participating in Medicaid. Schumer had said that Missouri and New Jersey canceled plans to increase rebates for generic drug makers after some companies withdrew from Medicaid or said they planned to do so.
However, CBO said those programs had a much smaller purchasing power than Medicaid and were not indicative of how drug companies would react to the increased rebates. CBO also noted that generic drug makers were unlikely to withdraw because the legislation would boost overall Medicaid spending on generic drugs by 10% to 15% (CQ HealthBeat, 12/9).
In other budget news, negotiators "are leaning toward" exempting Medicare Advantage plans from pay-for-performance programs, according to sources close to the talks, CQ HealthBeat reports. Under the Senate budget deficit reduction bill, 2% of funds paid to Medicare Advantage plans would be awarded for reaching pay-for-performance standards.
Because Medicare Advantage plans are a recent addition to Medicare and "face very thin profit margins," there is some concern that the plans "have enough on their hands learning to compete in that system without also having to adjust to a new payment scheme," CQ HealthBeat reports.
However, some lobbyists for managed care plans say the plans should not be exempted from pay-for-performance because they have already designed effective systems for gathering data, and the standards could improve the overall quality of care (CQ HealthBeat, 12/9).
In other news, conferees this week are expected to approve the conference report on the fiscal year 2006 Labor-HHS spending bill. The House on Nov. 17 "unexpectedly" rejected the first conference agreement, with at least seven Republicans citing cuts in rural health care as their reason for opposing the bill.
House Labor-HHS-Education Appropriations Subcommittee Chair Ralph Regula (R-Ohio) said the revised bill likely will include at least $100 million in new funding for rural health and education programs. Regula said new spending would likely be offset by cuts to CDC's flu vaccine program (Swindell, CQ Today, 12/9).
In negotiating budget cuts, Congress' "guiding principle should be to extract savings not from beneficiaries too poor to absorb the cost but from industries and institutions better able to bear the burden," a New York Times editorial states. "By that yardstick, the Senate's approach ... is far preferable to that of the House, which puts the burden on needy Medicaid beneficiaries," the editorial adds.
The "harshest measure" of the House Medicaid proposal -- allowing states to impose premiums and higher copayments for beneficiaries -- likely would "cause people who are barely scraping by to forego medical care until they become so sick they end up in an emergency room anyway." The Senate, on the other hand, would make changes to how Medicaid pays pharmacies and would change the rebate system.
According to the editorial, the cost of prescription drugs is the "most fruitful area for savings." Congress also should implement some cuts to Medicare before "cutting Medicaid too deeply," the editorial states (New York Times, 12/12).