House Panel OKs Budget Plan That Includes Cuts to Health Care Spending
On Monday, the House Budget Committee voted 21-9 along party lines to approve a budget reconciliation plan that includes several health-related spending cuts, the AP/San Francisco Chronicle reports (Taylor, AP/San Francisco Chronicle, 5/7).
The full House is expected to approve the bill on Thursday before it heads to the Senate, which is expected to reject it.
Details of the Plan
The measure would override automatic cuts scheduled to take effect next year because of a debt panel's failure to reach a compromise last summer (O'Donnell, National Journal, 5/7).
The bill would cut a total of $23.5 billion from Medicaid and the Children's Health Insurance Program, $4.2 billion from hospitals that serve low-income and uninsured patients and $33.7 billion from supplemental nutrition assistance. The Medicaid cuts would be achieved in part by repealing "maintenance-of-effort" requirements, which require states to maintain current benefit levels.
Republicans say eliminating the requirement will give states more flexibility to find more efficient ways to provide care to low-income residents (Weisman, New York Times, 5/7). The measure also would:
- Cut $14.1 billion over 10 years by eliminating HHS' authority to award grants to help states create health insurance exchanges under the federal health reform law;
- Repeal the Prevention and Public Health Fund, reducing spending by $10.9 billion over 10 years;
- Cancel unobligated balances for the Consumer Operated and Oriented Plan, which was created to provide grants to encourage the development of not-for-profit insurers and plans for the health insurance exchanges, saving $300 million over 10 years;
- Reduce spending by $23.5 billion over 10 years by modifying payment rates and program requirements for Medicaid and CHIP;
- Lower from 6% to 5.5% the threshold for state and health care providers' "hold harmless" agreements, reducing spending by $11.3 billion over 10 years;
- Eliminate increased Medicaid payments to territories under the overhaul, saving $6.3 billion over 10 years;
- Reduce the deficit by $43.9 billion over 10 years by allowing the government to recapture all overpayments on subsidies provided to U.S. residents to help them purchase health coverage, instead of capping the amount that can be recaptured (CQ HealthBeat, 5/7).
- Leave in place a provision included in the automatic cuts to reduce Medicare provider reimbursement rates by 2% (AP/San Francisco Chronicle, 5/7).
The bill also would make changes to rules on medical malpractice lawsuits, such as capping non-economic and punitive damages at $250,000 and limiting damages to "economically verifiable losses." In addition, the budget plan would require a sliding scale for attorneys' fees, reduce the statute of limitations for medical malpractice lawsuits and provide "safe harbor" for FDA-approved devices and drugs, according to CQ HealthBeat (CQ HealthBeat, 5/7).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.