Financing, Role of Preventive Care in Reform Still Unresolved

by Daniel Esquibel, California Healthline Managing Editor

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The dog days of August have taken President Obama to Montana and Colorado to stump for Democratic proposals to overhaul the health care system and fight back against criticism of the proposals.

But because neither the Senate nor the House has approved a bill, there are still a lot of questions about the effort, not the least of which is how it would be funded.

A Health Affairs Web exclusive published Aug. 18 indicates that Americans support health care reform but aren’t willing to shoulder federal income tax increases to cover the cost of a Medicaid expansion, subsidies for low-income people or subsidies for people with chronic illnesses.

Daniel Kessler and David Brady of Stanford’s Hoover Institution authored the paper, which is based on a January survey.  They write that the recession might have colored survey respondents’ answers and held out the possibility that people might be more willing to pay higher taxes for health care reform in more prosperous times.

Moreover, Kessler and Brady acknowledge that public support for financing health care reform might differ from their findings depending on the approach that Congress ultimately chooses.

Some supporters of Democratic health care reform proposals assert that greater use of preventive care and wellness would help make people healthier and curb health care cost increases, but the evidence doesn’t necessarily support that contention.

In a letter to Rep. Nathan Deal (R-Ga.), Congressional Budget Office Director Douglas Elmendorf cited research from the New England Journal of Medicine and other sources indicating that more widespread use of preventive care likely would increase federal health care spending, rather than cut expenditures.

Elmendorf wrote that experts nonetheless concluded that greater use of preventive care should be labeled “cost-effective” because the clinical benefits exceed the jump in costs. 

Taking a page from that argument, the California Endowment, Kaiser Permanente and four other health foundations called for prevention to occupy a central role in health care reform efforts. 

We won’t know until next month what role lawmakers will carve for prevention in a health care reform proposal.  In the meantime, here’s a rundown on the week’s reform news. 

Administration’s Message

  • On Thursday, White House senior adviser David Axelrod sent out an e-mail to President Obama‘s list of supporters, urging them to forward information that addresses the viral e-mails criticizing the president’s reform plans, the AP/San Francisco Chronicle reports (Werner, AP/San Francisco Chronicle, 8/13). The e-mail, posted on the White House Web site on Thursday, said critics were spreading “all sorts of lies and distortions” through uncorroborated “viral e-mails,” and urged supporters to help start “a chain e-mail of our own” to rebut “these wild misrepresentations that bear no resemblance to anything that’s actually been proposed” (Kornblut, Washington Post, 8/14).
  • Last week, the White House acknowledged that Obama misspoke at a recent town hall when he said AARP had endorsed reform legislation. The comment was rebuked by AARP Chief Operating Officer Tom Nelson (Koffler, Roll Call, 8/12). According to the Washington Times, White House officials said privately that Obama spoke accurately in general terms because AARP supports the reform effort but was incorrect when he used the word “endorse” (Ward, Washington Times, 8/12).

What’s In the Proposal

  • People who are homeless would become eligible for Medicaid under the current congressional health care reform proposals, the AP/Chronicle reports. According to the AP/Chronicle, the House bill (HR 3200) extends Medicaid eligibility to individuals with annual incomes up to $14,400, while the Senate bill caps the income threshold at $16,200. Currently, childless homeless adults usually do not qualify for Medicaid (Parry, AP/San Francisco Chronicle, 8/13).
  • A proposal to reimburse physicians for end-of-life care consultations is unlikely to be included in the final health care reform bill, HHS Secretary Kathleen Sebelius said during an appearance Sunday on ABC’s “This Week,” The Hill reports. On Thursday, Senate Finance Committee ranking member Chuck Grassley (R-Iowa) said the panel will eliminate the provision from its proposed reform bill. Senate Budget Committee Chair Kent Conrad (D-N.D.), a member of the Finance Committee’s bipartisan negotiating group on the bill, confirmed that plan during a television appearance Sunday (Rushing, The Hill, 8/16).
  • Criticism of an end-of-life care provision in the House health reform bill (HR 3200) is “leading key lawmakers to conclude that the health overhaul should leave out any end-of-life counseling provisions,” the Wall Street Journal reports. The provision would require Medicare to pay physicians to counsel patients once every five years about decisions such as setting up a living will, obtaining hospice care or establishing a proxy to make their health decisions if they are unable (Adamy, Wall Street Journal, 8/13).
  • The life insurance industry is criticizing a proposed federal long-term care insurance program that would provide a cash benefit to help seniors purchase assistance, such as adult day care or home modifications, that would help them stay in their homes if they become unable to perform daily tasks, CongressDaily reports. Frank Keating, the head of the American Council of Life Insurers, said the proposed program, which is included in two versions of health reform legislation being considered in Congress, quickly would become insolvent (Edney, CongressDaily, 8/12).

Shaping the Debate

  • Proponents and opponents of health reform legislation have spent a combined $57 million this year on advertising campaigns that are airing in more than 20 states, according to an analysis by the Campaign Media Analysis Group, USA Today reports. The analysis found that supporters of health reform have outspent the opposition 2-1 (Fritze/Jackson, USA Today, 8/14).
  • About 60,000 U.S. residents have dropped their AARP membership since July 1 because of the organization’s support for a health care overhaul, the AP/USA Today reports. AARP spokesperson Drew Nannis said it is not unusual for the organization to lose many members when it is advocating for a controversial issue. He added that AARP gained about 400,000 new members during the same period and that 1.5 million people renewed their memberships (AP/USA Today, 8/17).
  • Industry groups have begun criticizing a potential tax proposal on sugar-sweetened soft drinks that currently is not part of any reform legislation, USA Today reports. The American Beverage Association has spent $2 million on an ad campaign to oppose the tax. Proponents of the tax say that a higher tobacco tax succeeded in reducing smoking, which means it could both make U.S. residents healthier and help finance reform (Koch, USA Today, 8/17).
  • Critics of current health reform proposals are pointing to Tennessee’s public insurance program to cover its uninsured as an example of an unsuccessful public plan, the Journal reports. Opponents of health reform have said the high costs of the program, called TennCare, indicate that a public plan as part of national overhaul efforts would be financially unsustainable (Johnson, Wall Street Journal, 8/17).
  • Former CIGNA Vice President Wendell Potter last week alleged that the health insurance industry is covertly working to defeat health reform and is the source of the disruptions at town-hall meetings, The Hill reports (Soraghan, The Hill, 8/12). Potter appeared on Capitol Hill with House Rules Committee Chair Louise Slaughter (D-N.Y.) (Dennis, Roll Call, 8/12). Although his allegations are based on no current evidence, Potter says that “just as it did 15 years ago when the insurance industry led the effort to kill the Clinton reform plan,” it is using “shills and front groups to spread lies and disinformation to scare Americans away from the very reforms to benefit them the most,” adding that “the pattern is there” (Reichard, CQ HealthBeat, 8/12).
  • In an interview on NPR’s “All Things Considered” last week, Potter said that he believes the insurance companies are “indirectly” funding the disruptions in town-hall meetings by funneling money through PR firms to front groups designed solely to defeat the overhaul (Brand, “All Things Considered,” NPR, 8/11).
  • The U.S. Chamber of Commerce, the drug and insurance industries, and other groups are attempting to influence the reform debates but also are preparing alternate plans that include “going negative” in case their efforts fail, Politico reports. According to Politico, the contentious town-hall meetings could “give cover to some big business players” that have so far avoided directly challenging the Obama administration but could “turn their guns on the reform agenda and kill it” (Frates, Politico, 8/12). Unlike lobbying firms, grassroots advocacy organizations are not required to report their activities and expenses, giving industry players the freedom to fund efforts to get people out to town-hall meetings and express dissent (Snyder, The Hill, 8/10). 

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