Thune Amendment (#4333) on Paid-For Extenders Alternative

Wanted to pass along this summary of the Thune/Republican substitute amendment #4333 to the extenders bill (H.R. 4213) currently being considered.  While the Baucus substitute raises taxes, raises spending, and raises federal deficits by nearly $80 billion, the Thune amendment reduces taxes, reduces Washington spending, and reduces the federal budget deficit by $55 billion.  A summary of the health provisions follows immediately below.

Adds an additional year of the doc fix:

  • Provides a 2% increase in reimbursement levels for June-December of 2010, and additional 2% increases in both 2011 and 2012.  Costs $43.3 billion over ten years.

Drops the $24 billion FMAP state bailout.

Medical Malpractice reform:

  • Includes a variety of reforms to the medical liability system.  This includes caps on noneconomic and punitive damages, a “fair share” rule for multiple defendants, qualifications for expert witnesses, alternative dispute resolution, and time limits for bringing a medical liability claim.  Saves $49.7 billion over ten years.

Adds one-year Medicare extenders not included in the Baucus substitute, all of which would expire at the end of the calendar year unless otherwise noted:

  • Section 508 hospital reclassifications (expires at the end of FY 2010 – included in Baucus substitute) at a cost of $300 million over ten years;
  • Geographic floor for work, costing $600 million over ten years;
  • Therapy caps exception process, costing $1.1 billion;
  • Technical component of certain physician pathology services, costing $100 million;
  • Reimbursement raises for ambulance services, costing $100 million;
  • Mental health reimbursements (5% increase), costing $100 million;
  • Outpatient hold harmless provision, costing $300 million;
  • Reasonable cost payments for clinical diagnostic laboratory tests in rural areas (no significant score);
  • Qualifying Individual (QI) program, assistance to low-income seniors in paying Medicare premiums, costing $800 million;
  • Transitional Medical Assistance, which provides Medicaid benefits for low-income families transitioning from welfare to work, costing $800 million; and
  • Court improvement grants provided for in the Deficit Reduction Act (no significant score).

Adds several provisions to amend the Democrats’ health care law:

  • Expansion of Affordability Exemption to Individual Mandate:  Saves $11 billion by lowering the affordability exemption in the health care law’s individual mandate from 8 percent of income to 5 percent.  The affordability exemption creates a threshold so that people who do not have access to affordable health insurance (that costs less than the threshold) do not have to pay the individual mandate penalty.  In the underlying bill this threshold is 8 percent of income; lowering the threshold to 5 percent of income saves money because fewer people will take health care subsidies.  This provision was accepted by members on both sides during the Senate Finance Committee mark-up.  Saves $4.2 billion over ten years.
  • Medicaid Primary Care Payment:  Replaces the provisions in the health care law, which provide a temporary increase of federal funding for Medicaid reimbursement of primary care physicians in 2013 and 2014 – followed by a “cliff” cutting payments by 50 percent in 2015.  Re-directs the $8 billion provided for Medicaid primary care funding in the health reconciliation law to a grant program to allow states to increase primary care reimbursements on a permanent basis.  Saves $300 million over ten years.

Drops certain technical corrections to the health care law in the Baucus substitute.

Drops an expansion of government-imposed price controls on prescription drugs through the 340B program included in the Democrat substitute.


UPDATE: The Thune amendment’s “doc fix” costs $43.3 billion over ten years, which is more than outweighed by $49.7 billion in savings from liability reform over the same time span.  The Medicare extenders (Sections 521-531) collectively cost $4.2 billion, which is the amount of federal spending saved from the expansion of the affordability exception to the individual mandate.  Overall the health subtitle reduces the deficit by $2.2 billion over ten years, after taking all interactions into account.  The updated scores are reflected in the summary above.