Speaker Pelosi’s Health Care Takeover: Bad for Rural America
The Republican Conference has compiled a list of provisions in the Pelosi health care bill that would harm rural American patients, providers, and businesses:
Government-Run Health Care. Many Democrats—including President Obama—are insisting upon the inclusion of a so-called “public option” as part of a health care bill. However, H.R. 3962 would promote “choice” by creating a government-run health plan in an attempt to undercut Americans’ existing health coverage. The non-partisan Lewin Group has found that the government-run plan in H.R. 3962 would result in as many as 114 million individuals losing their current insurance. As a result, a government-run plan would likely lead to federal bureaucrats, not patients and doctors, making important decisions about Americans’ health care treatment options.
Medicare Advantage Cuts. The Congressional Budget Office (CBO) has estimated that provisions in H.R. 3962 would lead to a total of $170 billion in cuts being taken from Medicare Advantage plans that provide a range of health care options to seniors. These harmful and arbitrary cuts could result in Medicare Advantage plans moving out of rural areas, harming beneficiary choice and causing millions of seniors to lose their current coverage. According to former Clinton Administration official Ken Thorpe, while every senior in rural areas had access to a Medicare Advantage plan in 2007, only one in four rural beneficiaries had a choice of plans in 1999—and the significant cuts in the Democrat legislation could return rural seniors to the days when the only option is a one-size-fits-all government plan.
Disproportionate Share Hospitals. CBO estimates that H.R. 3962 would result in $10.3 billion in reductions in Medicare disproportionate share hospital (DSH) payments, and an additional $10 billion in Medicaid DSH reductions. These reductions could inflict more significant harm on rural hospitals in States whose Medicaid programs cover a low percentage of costs to care for the uninsured, as well as States whose DSH payment levels are already below the national average.
Impact on Imaging Facilities. According to CBO, H.R. 3962 would save $3 billion by increasing the presumed utilization rate for certain imaging equipment from 50 percent to 75 percent. Particularly for hospitals and clinics where utilization of imaging equipment might already be much lower than 50 percent, these savings could have a disproportionate impact on services to rural Americans.
Tax Increases. The provisions in H.R. 3962 imposing nearly half a trillion dollars of “surtaxes” on “high-income” filers would raise taxes for many American households—including family farms and other small businesses, who may report income in excess of the “surtax” threshold limits, even though their net personal income could be sharply below those levels. Combined with additional taxes on firms with payrolls of as little as $500,000 who cannot afford to pay for their workers’ health plan premiums, these tax increases on small businesses would represent a “double whammy” on the engine of American job growth.
Medicare Reductions. While Sections 1157 and 1158 provide $8 billion in additional federal funds to address geographic disparities in reimbursement levels as recommended by an Institute of Medicine study; however, “hold harmless” provisions ensuring rural areas will only receive additional payments, and cannot have their payments decreased, apply only until 2014. Moreover, H.R. 3692 requires a new payment methodology developed by federal bureaucrats beginning in 2015, and the Obama Administration has also explored various proposals to allow a board of federal bureaucrats to make binding recommendations on cost reductions within Medicare. There is nothing in these proposals that would prohibit the respective boards of bureaucrats from reducing—or even eliminating entirely—any temporary payment increases for rural providers.