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Follow the Money: How Industry Is Lobbying To Preserve Reform Law

Two years ago this week, then-House Speaker Nancy Pelosi (D-Calif.) unveiled the bill that would become the backbone of the Patient Protection and Affordable Care Act.

It only seems like efforts to repeal PPACA began that day, too.

A series of Republican presidential debates this year have kept criticism of the law in the news, and conservative-leaning trade groups, activists and politicians continue their calls for striking down PPACA. While some anti-PPACA fervor has ebbed, criticism of the law may surge again as the Supreme Court next week will consider taking up the case against reform.

One group continues to remain quiet on repeal: the health industry.

If anything, health insurance companies, device manufacturers, and many provider associations have strong financial motives to keep PPACA in place — and the sector continues to put its lobbying dollars where its pocketbook is.

Health Donations Remain Strong

The Center for Responsive Politics on Monday reported that the health industry remains atop its lobbying charts. The sector collectively has spent more than $373 million toward lobbying efforts in 2011, led by the pharmaceutical industry’s $181.5 million.

But while the industry in 2010 shifted toward favoring the GOP in some of its donations, ahead of midterm elections that juggled congressional majorities, it remains a staunch supporter of the White House’s current occupant.

Additional Center analysis found that President Obama’s re-election campaign has raised $1.6 million from the health care sector, significantly more than his top Republican challengers. (Mitt Romney has collected $920,000 and Rick Perry has brought in $494,000.)

Backing Architect of Current Law

There’s wide perception that the health law imposes new restrictions on businesses, including those in the health sector; as Kaiser Family Foundation’s Drew Altman observed, critics of PPACA often framed it as “a government takeover of the health care system.”

So why the continued industry support for the current government?

Chris Frates at National Journal notes that the health industry “is hedging its bets. The Obama administration still has a mountain of regulations to implement and trade associations and companies don’t want to alienate an administration that holds huge sway over their bottom lines. “ 

But there’s an even more pressing reason for health companies to keep Obama in seat.

There’s limited evidence that the industry would benefit from repealing reform — and a lot of data suggesting that PPACA will be a boon to the sector’s bottom line.

Hospitals are expected to benefit from the law’s expansion of health insurance coverage. Insurers are seizing on new opportunities in the individual market.

Even some of the law’s more fearsome provisions aren’t turning out as the health sector feared. CMS’ proposal to create accountable care organizations — which providers originally viewed as draconian, given restrictions on payment and potential risk — was toned down and made significantly more industry-friendly when the agency finalized the program last month.

Lobbying Focus Shifting To Preserving Programs, Provisions

Meanwhile, it’s hard to foresee what a repeal would actually look like.

As Drew Armstrong and Kristen Jensen write for Bloomberg Businessweek, calling to repeal PPACA may be “a killer applause line” at Republican presidential debates, but actually striking down the law would require a somewhat byzantine series of White House-directed efforts and acts of Congress.

In many ways, fighting over PPACA is last year’s battle. Instead, the industry is concerned with what’s coming this month: the so-called Super Committee and its Nov. 23 deadline for recommendations.

Lobbying efforts are focused on Congress’ deficit reduction panel, which is charged with coming up with $1.2 trillion in cuts over a decade, and federal health spending is squarely in its crosshairs; many expect the committee to call for hundreds of billions of dollars in cuts to Medicare and Medicaid.

The pharmaceutical sector also is focused on preserving Medicare Part D’s current structure, pushing back on potential changes to the drug benefit program that would give CMS more negotiating power.

We’ll be watching for the Super Committee’s recommendations, as well as how the health care sector is lobbying to shape them. Meanwhile, here’s what else is making news around the nation.

On the Hill

  • Last week, the House voted 262-157 to approve a bill (HR 2576) to fix a “glitch” in the federal health reform law that would allow middle-income early retirees to qualify for Medicaid (Millman, Politico, 10/27). The bill would use a more restrictive standard than modified adjusted gross income to determine eligibility, making it harder for U.S. residents to qualify for Medicaid and private health insurance subsidies. The measure is projected to save $13 billion over a decade. Last week, the Obama administration expressed support for the bill (Zigmond, Modern Healthcare, 10/25).
  • Last week, Sens. Chuck Grassley (R-Iowa) and Orrin Hatch (R-Utah) sent a letter to HHS asking why the agency has failed to use moratoriums established last year to protect against potential fraudulent Medicare providers (Kennedy, AP/Miami Herald, 10/26). The federal health reform law granted HHS the authority to temporarily stop accepting new providers if there is a significant risk of fraud. Grassley and Hatch said it is “deeply disconcerting” that CMS officials have “failed to act in the best of interest” of consumers by not using their new authority. They asked HHS Secretary Kathleen Sebelius to respond to their letter by Dec. 2 (McCarthy, National Journal, 10/25).
  • At a joint hearing of two House subcommittees last week, Republicans reiterated calls to repeal the Community Living Assistance Services and Supports Act, while Democrats argued that HHS should move forward with long-term care efforts (Quinton, National Journal, 10/26). Rep. Frank Pallone (D-N.J.) said he disagreed with HHS’ decision to indefinitely suspend the program and urged the agency to appoint an advisory council of stakeholders to oversee the program (Zigmond, Modern Healthcare, 10/26). During the hearing, Rep. Jim Matheson (D-Utah) announced his support for repealing the program, joining Rep. Dan Lipinski (D-Ill.) — who sponsored legislation to repeal the program in March — as the only Democrats calling for repeal (Baker, “Healthwatch,” The Hill, 10/26).
  • In a letter to Sen. John Thune (R-S.D.) on Monday, the Congressional Budget Office reported that repealing the federal health reform law’s Community Living Assistance Services and Supports Act would have no effect on the federal deficit. Thune recently introduced a bill (S 720) to formally repeal the program (Baker, “Healthwatch,” The Hill, 10/31). Thune said CBO’s finding “only reiterates the need to immediately remove this deeply flawed program from the books before the Obama administration, or any other, tries to resurrect it through administrative maneuvering,” adding that he will continue to push to repeal it and “to work toward full repeal” of the federal health reform law (Bunis, CQ HealthBeat, 10/31).
  • Last week, House Appropriations Health Subcommittee Chair Denny Rehberg (R-Mont.) introduced legislation to the debt panel to repeal portions of the federal health reform law. The bill would repeal the law’s expansion of Medicaid in 2014, eliminate federal subsidies that would allow people to purchase health insurance through state insurance exchanges and repeal the CLASS Act (Pecquet, “Healthwatch,” The Hill, 10/25).

Challenges to Reform

Rolling Out Reform

  • A new report from the Government Accountability Office warned that the $5 billion in funding that the federal health reform law allotted for the overhaul’s Early Retiree Reinsurance Program will be depleted by September 2012 (Radnofsky, Wall Street Journal, 10/31). GAO said HHS has already spent about $2.9 billion in the program, which was designed to prevent employers from dropping retiree health coverage before provisions prohibiting insurers from denying coverage based on pre-existing conditions take effect in 2014 (Baker, “Healthwatch,” The Hill, 10/31). Sen. Mike Enzi (R-Wyo.) issued a statement criticizing HHS for its funding distribution methods. However, federal officials said the accelerated pace was an indicator of the program’s success (Wall Street Journal, 10/31).

In the States

  • Massachusetts officials recently unveiled a proposal to create a managed care program for residents eligible for both Medicaid and Medicare as part of a broader effort to cut spending on dual eligibles. The plan would reduce the $4 billion the state spends on dual eligibles by about 2%. The plan calls for the state to employ “integrated care” organizations that could include private or other third-party insurers and hospital networks, as well as “care teams” that would provide and coordinate acute, behavioral and long-term care services. Massachusetts and 14 other states received grants of up to $1 million from the federal health reform law to overhaul their programs for dual eligibles (Levitz, Wall Street Journal, 10/27).

Public Opinion

  • The Kaiser Family Foundation‘s October Health Tracking poll found that public support for the federal health reform law has declined to the lowest level since the law’s passage in March 2010. In the survey of 1,223 U.S. residents, 51% of respondents said they dislike the reform law and 34% said they still view the overhaul favorably. In the foundation’s September poll, 41% said they approved of the law and 43% had an unfavorable opinion of it (Selyukh, Reuters, 10/28). The sharp decrease in support between September and October can be attributed to a significant decrease in support among Democrats (Rau, Kaiser Health News, 10/28).

Administration Actions

  • The White House is calling on community health centers to hire at least one veteran over the next three years and pledged to give grants to physician assistant programs that train veterans (Pecquet, “Healthwatch,” The Hill, 10/25). The federal health reform law provides the centers $11.5 billion through 2015 for staffing and operations improvements (Nakamura, “44,” Washington Post, 10/25). Since 2010, the federal government also has provided about $45 million in grants for physician assistant training programs (“Healthwatch,” The Hill, 10/25).

Effects on the Elderly

  • Monthly premiums for Medicare Part B, which covers physician visits and outpatient procedures, will rise by $3.50 next year to $99.90 for most beneficiaries (Radnofsky, Wall Street Journal, 10/27). Earlier this year, Medicare trustees projected that premiums would increase by $10.20 (Pear, New York Times, 10/27). Obama administration officials attributed the lower rates in part to cost-cutting provisions under the federal health reform law and beneficiaries’ lower use of services (Kliff, Washington Post, 10/27).

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