House Energy and Commerce Committee Approves $9.5B in Medicaid Cuts
The House Energy and Commerce Committee on Thursday voted 28-22 along party lines to approve a fiscal year 2006 budget reconciliation package that would cut Medicaid spending by about $9.5 billion over five years, the AP/San Francisco Chronicle reports (Taylor, AP/San Francisco Chronicle, 10/27). The package would:
- Change Medicaid's prescription drug payment system, including factoring bulk discounts into the program's drug reimbursement formula, for $1.2 billion in savings, according to a preliminary Congressional Budget Office estimate;
- Allow states to raise some beneficiaries' copayments from $3 to $5 over three years and to collect copayments at emergency departments for $2.6 billion in savings;
- Tighten regulations for seniors who transfer assets in order to qualify for Medicaid for $2.3 billion in savings;
- Grant states new flexibility to "structure their Medicaid coverage more like private health plans" for $2 billion in savings, according to CQ Today; and
- Allow states to create a prescription drug formulary that would result in higher costs for nonpreferred drugs, with an exemption for mental health drugs, as approved in an amendment by Rep. Steve Buyer (R-Ind.).
Amendments to the reconciliation package that were not approved include:
- A proposal by Rep. Sherrod Brown (D-Ohio) that would have eliminated a "stabilization fund" created under the 2003 Medicare law aimed at encouraging the participation of private health plans in the new drug benefit; a similar measure is in the Senate Finance Committee's reconciliation package;
- A proposal by Rep. Jan Schakowsky (D-Ill.) that would have removed a provision to make seniors with more than $500,000 in home equity ineligible for long-term, Medicaid-funded care;
- A proposal by Rep. Ted Strickland (D-Ohio) that would have removed language that grants states more flexibility in designing benefits packages; and
- A proposal by Rep. Edward Markey (D-Mass.) that would have eliminated the entire section of the bill that addresses Medicaid (Schuler, CQ Today, 10/28).
Energy and Commerce Committee Chair Joe Barton (R-Texas) on Thursday said he had prepared but will not offer an amendment that would increase drug manufacturer rebates to the government. Such a move would have put the Energy and Commerce Committee package more in line with the Finance Committee proposal.
According to the Wall Street Journal, "[f]ellow Republicans said there had been pressure from party leaders not to increase the rebates," which potentially would have saved more than $1 billion (Rogers, Wall Street Journal, 10/28).
Barton said he was not "dismissing" the idea of making some cuts to Medicare, adding, "It's worthy of a review" (CQ Today, 10/28).
Barton said, "The reforms we are offering ... will help to save the program while at the same time protecting the poorest of our society" (AP/San Francisco Chronicle, 10/27).
Rep. Henry Waxman (D-Calif.) said flexibility provisions in the bill meant that beneficiaries "could get fewer medically necessary services."
Critics have said "the burden [from cost-sharing provisions in the House bill] will fall most heavily on working-class families eligible for Medicaid under the state and federal rules that allow some coverage above the poverty line," the Journal reports (Wall Street Journal, 10/28).
Meanwhile, the Senate on Thursday voted 94-3 to approve the FY 2006 appropriations bill (HR 3010) for HHS and the departments of Labor and Education, the AP/Chronicle reports (AP/San Francisco Chronicle, 10/27). The Journal reports that "in anticipation of a White House request for money to prepare for a potential outbreak of avian flu," the bill includes $7.97 billion in emergency funds for that purpose.
Senate Majority Leader Bill Frist (R-Tenn.) said he expects Bush to speak on the avian flu funding issue next week (Wall Street Journal, 10/28).
Labor-HHS-Education Appropriations Subcommittee Chair Arlen Specter (R-Pa.) raised a point of order on a separate amendment by Sen. Patty Murray (D-Wash.) that would have provided $2 billion in emergency funding for states to provide "stopgap" prescription drug coverage for low-income seniors and people with disabilities. Specter said the proposal was not germane to the bill (CQ HealthBeat, 10/27).
The bill -- the largest of the spending measures considered by Congress each year -- includes $146 billion for nonentitlement programs and about $458 billion for other programs, including Medicare and Medicaid. The bill includes $29.4 billion for NIH (AP/San Francisco Chronicle, 10/27). The bill exceeded President Bush's budget request by several billion dollars, according to the Journal (Wall Street Journal, 10/28).
The bill will now move to House-Senate conference committee (AP/San Francisco Chronicle, 10/27). The House passed its Labor-HHS spending bill on June 24, with $142.5 billion in discretionary spending (CQ HealthBeat, 10/27).