Weekly Newsletter: June 2, 2008

Health Centers Bill Would Authorize Significant Spending Increase

This week, the House is expected to take up under suspension of the rules legislation (HR 1343) reauthorizing the community health center program. The bill authorizes $14 billion in spending over the next five fiscal years, subject to annual appropriations. In addition, the bill would expand the scope of an existing government program to extend federal liability protection to volunteer medical practitioners working at community health centers.

Some conservatives may be concerned that the amount of spending contemplated by this legislation—a 40% increase in funding over a bill the House passed in 2006—may be inappropriate as a matter of fiscal policy, and further should not be considered under expedited House procedures. Some conservatives may also be concerned that the legislation’s stated goal of doubling the number of patients treated at community health centers by 2015 may be used as a justification for further spending increases in future years. Lastly, some conservatives may be concerned with a proposed expansion of a federal liability program for health center workers that has its roots in the flaws of the current medical liability system. Some conservatives may instead champion the comprehensive liability reform that all medical practitioners—private and public, volunteer and paid—need in order to restore the integrity of the doctor-patient relationship and reduce the amount of harmful litigation.

The Outlook Ahead

As Congress returns from its Memorial Day recess, several health care items remain ripe for legislative activity in the coming weeks. Democrat leaders have advised that a final version of mental health parity legislation may be voted on by both chambers, and recent reports indicate that negotiations in the Senate on health IT may yield activity prior to the August recess. In addition, legislative provisions repealing Medicaid fiscal integrity regulations, providing incentives for states to expand the State Children’s Health Insurance Program (SCHIP) to wealthier families, and imposing restrictions on physician-owned specialty hospitals remain under consideration as part of the wartime supplemental appropriations measure. The RSC has weighed in with conservative concerns on several aspects of these proposals, and will continue to do so as the process moves forward.

However, the most prominent health debate will center on the scheduled July 1 reduction in Medicare physician reimbursements under the sustainable growth rate (SGR) mechanism, and any action Congress may take to forestall such reductions. In anticipation of the debate on the Medicare legislative package, the RSC has prepared two Policy Briefs providing background on comparative effectiveness research and the Medicare Advantage program.

Articles of Note: A Tale of Two States

Last Thursday’s Wall Street Journal contained two editorials on the diverging status of health insurance markets across the 50 states. One article highlighted several key reforms enacted by Gov. Charlie Crist (R-FL) and the legislature to reform Florida’s insurance market. With the legislation’s passage, Florida became the largest of a growing number of states that are permitting carriers to offer comprehensive, lowcost insurance policies free from onerous state benefit mandates. Supporters of the concept believe that such a reform could reduce health insurance premiums by permitting carriers to create innovative insurance products and consumers to buy the plan that most suits their needs—allowing, for instance, a 20-something single male to decline maternity coverage in exchange for a lower insurance rate.

Meanwhile, a Republican Assemblyman in New Jersey introduced legislation permitting Garden State residents to purchase health insurance policies offered in other states. The initiative closely resembles federal legislation (HR 4460) offered by Congressman John Shadegg (R-AZ), and would, like the Florida legislation, attempt to reduce health insurance premiums by circumventing costly state regulations and increasing the options for consumers to find affordable coverage. Such a proposal could have significant implications in New Jersey, where guaranteed issue regulations—which encourage individuals to wait to purchase health insurance until they become sick—have raised premiums to nearly twice the national average, pricing many younger New Jerseyans out of purchasing coverage.

Many conservatives may support both these efforts, and hope that the success of Florida’s experiment provides the incentive for New Jersey and other states to follow its lead. The Journal editorial notes that the plans created by the Florida measure are “not a cure-all,” but conservatives may believe that these and similar efforts to create a more consumer-friendly health care environment could play a significant role in reducing the growth of health care costs over time.

Read the articles here: “The Florida Revelation…
…And Escape from New Jersey