Medicare Funding a Key Issue in Second Day of Finance Panel’s Markup
On Wednesday, the Senate Finance Committee spent much of its second day of marking up its draft health reform bill addressing some "politically volatile" proposals to cut Medicare spending, the Washington Post reports.
The bill calls for reductions of more than $400 billion over 10 years to the growth of spending in Medicare and other federal health programs. A bulk of the savings -- about $200 billion -- would be generated by reducing payment to hospitals, nursing homes and other health care providers.
Another $113 billion in reductions would be generated through reimbursement cuts to Medicare Advantage plans (Connolly/Montgomery, Washington Post, 9/24).
The committee rejected two Republican amendments aimed at eliminating the spending reduction proposals, which committee Chair Max Baucus (D-Mont.) included in the bill to offset the cost of making health coverage more affordable for more U.S. residents.
Baucus ruled the two amendments out of order because they did not propose alternatives to replace the lost funding, a ruling that the committee upheld.
The committee also voted 14-9 to reject an amendment by Sen. Orrin Hatch (R-Utah) that would have preserved payments to the MA plans. Democrats noted that MA plans are paid 13% more on average compared with traditional Medicare.
According to CQ Today, Hatch's amendment also would have required the Congressional Budget Office to verify that the benefits of MA plan enrollees would not be affected before and changes to the program are made.
The committee instead voted 14-9 to adopt an amendment by Baucus that would require CBO to ensure that MA plan enrollees would not lose their basic Medicare benefits if any changes to the program are implemented (Wayne , CQ Today, 9/23).
Committee Republicans said that the proposed reductions would affect the availability and quality of care for seniors.
Senate Minority Whip Jon Kyl (R-Ariz.), a Finance Committee member, said seniors "have reason to be worried" about the impact of the reductions on their care.
GOP panel members also noted that insurers may be forced to pass the added costs down to customers in the form of reduced benefits or higher premiums.
However, Baucus and other Democrats defended the proposals, saying that over-expenditures in the programs have led to the high costs of care.
Several Democrats expressed their intentions to introduce similar but smaller proposals that would address the Republican desire to restore the proposed reductions to Medicare, the Post reports (Washington Post, 9/24).
Meanwhile, the committee voted to retain a provision in the bill to create an independent federal commission that would be authorized to develop strategies to stem the growth of Medicare. The commission's recommendations would take immediate effect unless Congress takes action to implement other cost-saving mechanisms (Pear/Calmes, New York Times, 9/24).
The committee also adopted an amendment by Sen. Chuck Grassley (R-Iowa), the panel's ranking member, that would prohibit top government officials from sitting on an agency board tasked with monitoring the research into the comparative effectiveness of drugs and other medical applications (Wayne , CQ Today, 9/23).
Timeline for Bill Takes Spotlight
On Wednesday, the committee also voted 12-11 to reject an amendment by Sen. Jim Bunning (R-Ky.) that would have delayed a final committee vote until the bill's legislative language and a complete CBO analysis of the bill have been made available.Â The amendment also would have required that the bill's text be made available online to the public for at least 72 hours before the committee voted on it (Budoff Brown/Frates, Politico, 9/24).
Sen. Olympia Snowe (R-Maine), who voted for the amendment, said, "Time is our ally, not our enemy," adding, "I want to do my job, and our job is to sit here and do it as long as it takes" (Drucker , Roll Call, 9/23).
The committee, however, adopted on a party-line vote an amendment by Baucus to require a cost estimate and an explanation of the bill in "conceptual" terms to be made available online, according to Politico.
Noting CBO Director Douglas Elmendorf's testimony on Tuesday, during which he said that a complete scoring of the bill would take at least two weeks, Baucus told the panel, "I would like to remind our colleagues the effect of this amendment will be this: After we complete action, we will have to wait another two to three weeks before we can vote on it" (Budoff Brown/Frates, Politico, 9/24).
Baucus expressed uncertainty about whether the committee would complete its markup of the bill by the end of the week, adding that he is committed to engaging in a debate with the panel members to hear their concerns and proposals. However, he indicated that he will not accommodate any efforts to delay the proceedings (Drucker , Roll Call, 9/23).
'Cadillac Plans' Tax Draws Further Criticism
In testimony before the Finance Committee, Thomas Barthold -- chief of staff for the Joint Committee on Taxation -- said that the proposed excise tax on high-priced insurance plans could affect some families with annual earnings under $200,000, The Hill's "Blog Briefing Room" reports.
When asked about which income groups likely would be affected by the new tax, Barthold said, "We have not done a combined distribution analysis across income to specifically answer your question," adding, "But to the extent that, yes, we think that some people would be subject to the penalty excise tax, when everything shakes out, we would expect that some would have incomes less than $200,000" (O'Brien, "Blog Briefing Room," The Hill, 9/23).
Insurers Express Concern With Revisions
Officials from America's Health Insurance Plans and the BlueCross BlueShield Association on Wednesday expressed concern with two revisions that Baucus made to the draft bill, CongressDaily reports.
According to CongressDaily, the insurers are concerned about a proposal to raise a $6 billion annual fee on companies to $6.7 billion, which they said would increase the cost of consumers' premiums by "as much as three times" the 1% increase that CBO initially estimated.
Insurers also expressed concern about a provision that would restrict insurers to charging older customers four times the amount younger customers are charged for premiums. The original proposal capped older U.S. residents' premiums at five times younger residents'.
The insurers said the change would raise premium costs "significantly" and reduce coverage for both groups while narrowing the risk pool (Edney, CongressDaily, 9/23).
PhRMA, Members Could Withdraw Support for Bill
A proposed amendment to modify the $80 billion cost-savings deal that Baucus and the White House reached with the pharmaceutical industry over the summer could undermine the industry's support for the Finance Committee's bill, a top industry official and lobbyist said separately on Wednesday, Roll Call reports.
Speaking at a health care meeting, Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America, said the industry's continued support would be "contingent upon a good bill."Meanwhile, a pharmaceutical lobbyist told Roll Call that PhRMA and its members would have no choice but to rescind their support for the legislation if the amendment is adopted (Murray, Roll Call, 9/24). 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.