How Single Payer Would Make Outbreaks Like Coronavirus Worse

The past several weeks have seen two trends with important implications for health policy: Vermont Sen. Bernie Sanders’s burst of momentum following strong political showings in both Iowa and New Hampshire has drawn greater attention to his proposal for single-payer health care, as China struggles to control a coronavirus outbreak that first emerged at the end of last year.

The two events are linked by more than just time. The coronavirus outbreak provides a compelling argument against Sanders’s so-called “Medicare for All” program, which would upend the health-care system’s ability to respond to infectious disease outbreaks.

In an Outbreak, Could You Obtain Care?

For starters, supporters of Sanders’s plan have admitted that under single payer, not all patients seeking care will obtain it. In 2018, People’s Policy Project President Matt Bruenig claimed that while demand for care might rise under single payer, “aggregate health service utilization is ultimately dependent on the capacity to provide services, meaning utilization could hit a hard limit.”

By eliminating virtually all patient payments for their own care, single payer would increase demand for care—demand Bruenig concedes the system likely could not meet, even under normal circumstances. Consider that an outbreak centered more than 6,000 miles from the Pacific coast has already led to a run on respiratory face masks in the United States. During a widespread outbreak on our shores, an influx of both sick and worried-but-well patients could swamp hospitals already facing higher demand for “free” care.

Bureaucrats’ Questionable Spending Priorities

While Sanders’s legislation attempts to provide emergency surge capacity for the health-care system, experience suggests federal officials may not spend this money wisely. Section 601 of the House and Senate single-payer bills include provisions for a “reserve fund” designed to “respond to the costs of treating an epidemic, pandemic, natural disaster, or other such health emergency.” However, neither of the bills include a specific amount for that fund, leaving all decisions for the national health care budget in the hands of the Department of Health and Human Services.

And federal officials demonstrated a questionable sense of policy priorities in the years leading up to the 2014 Ebola outbreak. Of the nearly $3 billion from Obamacare’s Prevention and Public Health Fund given to the Centers for Disease Control in the years 2010-2014, only about 6 percent went towards building epidemiology and laboratory capacity. Instead, CDC spent $517.3 million funding grants focused on objectives like “improving neighborhood grocery stores” and “promoting better sidewalks and street lighting.”

Socialized Medicine Brought to Its Knees By…the Flu?

Including a system of global budgets as part of a transition to single payer would leave hospitals with little financial flexibility to cope with a sudden surge of patients. Sanders’s Senate version of single-payer legislation does not include such a payment mechanism, but the House single-payer bill does. Sen. Elizabeth Warren and other liberal think-tanks believe the concept, which provides hospitals lump-sum payments to cover the facilities’ entire operating budget, can help reduce health-care costs.

But in its May 2019 report on single payer, the Congressional Budget Office noted that consistently slow growth of global budget payments in Britain’s National Health Service has “created severe financial strains on the health care system.” And how: Rising hospital bed occupancy rates have created longer wait times in emergency rooms, with patients stuck on gurneys for hours. In one example of its annual “winter crisis,” two years ago the NHS postponed 55,000 surgeries due to capacity constraints, with one ER physician apologizing for “Third World conditions of the department due to overcrowding.”

A British health system barely able to cope with a predictable occurrence like a winter flu outbreak seems guaranteed to crumble in the face of a major pandemic. Voters lured by the siren song of socialism should bear that in mind as they ponder news of the coronavirus and Sanders’ “Medicare for All.”

This post was originally published at The Federalist.

House Health Care Bills Show Misplaced Priorities

Why would House Republican leadership place the concerns of gym owners over those of pro-lifers? And why would that same leadership embrace a policy suggestion from the liberal group Families USA that could entrench Obamacare while raising premiums for young people?

While the House will consider legislation this week providing tax breaks to individuals who buy gym memberships, the House has yet to consider legislation cutting off tax breaks for abortion this Congress. On the latter front, an expansion of “copper” catastrophic insurance plans would effectively eliminate a regulatory provision that has lowered premiums for young Americans—another misplaced priority that could cause consternation for some conservatives.

What’s Inside Some Health Savings Account Legislation

However, Section 8 of one of the bills would allow for a $500 deduction for gym memberships or instruction, and a $250 deduction for safety equipment, as a qualified medical expense. The amounts would double for joint returns.

While just about everyone supports increasing Americans’ levels of physical activity, the provision seems questionable at best. The tax reform bill enacted not eight months ago attempted to eliminate these kinds of deductions from the tax code, creating a simpler, fairer process. This proposal would turn right around and add more complexity, by requiring the IRS to issue new regulations “to determine…what does not constitute a qualified physical activity, including golf, hunting, sailing, horseback riding, and other similar activities.”

The federal government already tries to do too many things, and has too great a role in Americans’ lives as it is. Do we really need the IRS determining what is, and is not, a “qualified physical activity?”

As for Abortion and HSAs

In fact, some pro-life leaders have opposed provisions that would allow individuals to use HSA dollars to fund insurance premiums, because pro-lifers want to prohibit those funds from being used to pay for abortion coverage (or abortions period). But the House has yet to vote this Congress on limiting abortion as a qualified medical expense.

The pro-life legislation that the House voted on in January 2017, H.R. 7, sponsored by Rep. Chris Smith (R-NJ), prohibited taxpayer dollars from funding abortion in all cases, including Obamacare exchange plans. However, it did not address preferences in the tax code relating to abortion, such as the qualified medical expense deduction.

It seems that the House Ways and Means Committee, which marked up the bills in question, cares more about satisfying lobbyists than responding to their large pro-life constituency. From gym owners to device makers—who have lobbied intently for the Obamacare device tax repeal that the House will also consider this week—the series of health care bills contains myriad provisions, some good and some not-so-good, advocated by business lobbyists. Unfortunately, pro-life advocates have yet to receive similar consideration.

Unintended Consequences of Expanding ‘Copper’ Plans

However, because only certain individuals currently qualify for “copper” plans, insurers can adjust their premiums downward accordingly. Section 1312 of Obamacare contains a single risk pool requirement, meaning that insurers must rate all their products in a given state as a single book of business in determining premium rates. But a rule the Obama administration released in 2013 included a special exception to that provision for “copper” plans. These catastrophic plans may adjust their rates to reflect “the expected impact of the specific eligibility categories.”

In other words, because primarily young individuals enroll in catastrophic plans, insurers can at present lower their premiums to reflect that fact. However, by making everyone eligible for “copper” coverage, the House bill would effectively eliminate this adjustment, thus raising premiums for the 18- to 29-year-old individuals enrolled in the plans.

Effects of the ‘Copper’ Change

Catastrophic plans have not proven particularly popular on the exchange market, with only 1 percent of enrollees purchasing them as of earlier this year. However, that lack of popularity arises because individuals receiving premium subsidies (i.e., most of the people buying coverage directly from the exchange) cannot apply those subsidies to “copper” plans.

Paradoxical as it may sound, expanding these popular plans to all age groups could actually curb their appeal. While a recent eHealth analysis claims that an expansion of “copper” plans could save near-seniors (i.e., those aged 55-64) an average of $4,608 per year, it likely will not do so. eHealth’s analysis compares the current 41 percent differential between “copper” premiums and bronze premiums to arrive at its figure.

However, as noted above, the current “copper” rates assume enrollment primarily by individuals under 30. eHealth’s analysis thus compares rates for a market of individuals aged 18-29 to a market of individuals aged 18-64—which explains the 41-percentage point difference in premiums. But if “copper” plans expand to all ages, that premium differential will narrow—and premiums for the 18-29 population will likely increase.

Single Risk Pool Bolsters Obamacare

More to the point: The “copper” plan provision includes language reinforcing Obamacare’s single risk pool. It also undermines the intent of last year’s Consumer Freedom Amendment, offered in the Senate by Sen. Ted Cruz (R-TX), which would have allowed for the sale of non-compliant plans alongside Obamacare-compliant plans.

The difference on this one provision speaks to a broader philosophical debate. Moderates want to support Obamacare’s exchanges by passing “stability” legislation and expanding subsidies. So does Families USA, which in December 2012 submitted a comment to the Department of Health and Human Services opposing the rate adjustment provision for catastrophic plans, because it could tend to segment the market.

By contrast, conservatives want to offer people lifeboats away from the exchanges—options such as short-term insurance plans, association health plans, and the like. On that front, this week’s legislation does not advance the ball, and expanding “copper” plans could on balance represent a step back.

Thankfully, House leadership did not end up attaching attach an insurer bailout to this week’s HSA bills, after early rumblings in that direction. But the fact that conservatives even need to have these discussions speak to the ways in which many House Republicans want to strengthen Obamacare rather than repealing it.

This post was originally published at The Federalist.

Obamacare’s Prevention Priorities: Mammograms, No; Jungle Gyms, Yes

Last week, the New York Times reported on a study conducted by the Mayo Clinic, which found that the number of women in their 40s obtaining mammograms declined “in the year after an expert panel’s recommendation that women delay regular breast cancer screenings until age 50.”  The “expert panel” in question is the US Preventive Services Task Force – referenced 21 different times in Obamacare, and granted the power by the law to set federal coverage standards for preventive coverage by insurers.

The Mayo study leads to the unsurprising conclusion that if a government board decides a treatment is not “approved,” people will receive less of that treatment.  Empowering a government board will decrease access to preventive care screenings, as insurance companies will likely follow the directives of a federally-backed panel.  So rather than keeping choices between patients and doctors, Washington has effectively short-circuited that process, because the rulings of a government board will lead insurance companies to stop covering preventive treatments.

Unfortunately, it’s not just access to mammograms that may be affected – prostate cancer screening may well be next.  Earlier this year, the US Preventive Services Task Force released its final recommendations regarding prostate cancer screening.  Even before the Task Force’s draft recommendations were issued last October, insurers were already re-evaluating whether or not to cover screening tests in light of the Task Force’s decision.

Yet even as the recommendations from the Preventive Services Task Force have reduced the use of preventive care screenings, the Administration has been promoting “preventive services” elsewhere.  Over the past several months, HHS has been handing out grants from Obamacare’s prevention new “slush fund” to finance things like jungle gyms, bike paths, and crosswalks.  So when it comes to prevention funding from this Administration, the mantra appears to be “Mammograms, no; jungle gyms, yes!”

46 Reasons to Repeal an Unconstitutional Law NOW

46 50 Reasons to Repeal ALL of Obamacare NOW

Today the Supreme Court struck down portions of Obamacare as unconstitutional – states cannot be “dragooned” into expanding their Medicaid programs according to the law’s dictates. However, a list of 50 particularly onerous or egregious provisions in Obamacare (with sections from the statute duly noted) reveals just how much of this bad law remains. By the most generous interpretation, the Court struck down only four of the 50 egregious policies, illustrating why Congress should immediately repeal the entire measure once and for all. Among many other bad policies, the law:

  1. Imposes $800 billion in tax increases, including no fewer than 12 separate provisions breaking candidate Obama’s “firm pledge” during his campaign that he would not raise “any of your taxes” (Sections 9001-9016)
  2. Forces Americans to purchase a product for the first time ever (Section 1501)
  3. Creates a board of 15 unelected and unaccountable bureaucrats to make binding rulings on how to reduce Medicare spending (Section 3403)
  4. Pays over $800 billion in subsidies straight to health insurance companies (Sections 1401, 1402, and 1412)
  5. Requires all individuals to buy government-approved health insurance plans, imposing new mandates that will raise individual insurance premiums by an average of $2,100 per family (Section 1302)
  6. Forces seniors to lose their current health care, by enacting Medicare Advantage cuts that by 2017 will cut enrollment in half, and cut plan choices by two-thirds (Section 3201)
  7. Imposes a 40 percent tax on health benefits, a direct contradiction of Barack Obama’s campaign promises (Section 9001)
  8. Relies upon government bureaucrats to “issue guidance on best practices of plain language writing” (Section 1311(e)(3)(B))
  9. Provides special benefits to residents of Libby, Montana – home of Max Baucus, the powerful Chairman of the Senate Finance Committee, who helped write the law even though he says he hasn’t read it (Section 10323)
  10. Imposes what a Democrat Governor called the “mother of all unfunded mandates” – new, Washington-dictated requirements of at least $118 billion – at a time when states already face budget deficits totaling a collective $175 billion (Section 2001)
  11. Imposes reductions in Medicare spending that, according to the program’s non-partisan actuary, would cause 40 percent of all Medicare providers to become unprofitable, and could lead to their exit from the program (Section 3401)
  12. Raises premiums on more than 17 million seniors participating in Medicare Part D, so that Big Pharma can benefit from its “rock-solid deal” struck behind closed doors with President Obama and Congressional Democrats (Section 3301)
  13. Creates an institute to undertake research that, according to one draft Committee report prepared by Democrats, could mean that “more expensive [treatments] will no longer be prescribed” (Section 6301)
  14. Creates a multi-billion dollar “slush fund” doled out solely by federal bureaucrats, which has already been used to fund things like bike paths (Section 4002)
  15. Subjects states to myriad new lawsuits, by forcing them to assume legal liability for delivering services to Medicaid patients for the first time in that program’s history (Section 2304)
  16. Permits taxpayer dollars to flow to health plans that fund abortion, in a sharp deviation from prior practice under Democrat and Republican Administrations (Section 1303)
  17. Empowers bureaucrats on a board that has ruled against mammograms and against prostate cancer screenings to make binding determinations about what types of preventive services should be covered (Sections 2713 and 4104)
  18. Precludes poor individuals from having a choice of health care plans by automatically dumping them in the Medicaid program (Section 1413(a))
  19. Creates a new entitlement program that one Democrat called “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of” – a scheme so unsustainable even the Administration was forced to admit it would not work (Section 8002)
  20. Provides $5 billion in taxpayer dollars to a fund that has largely served to bail out unions and other organizations who made unsustainable health care promises to retirees that they cannot afford (Section 1102)
  21. Creates a tax credit so convoluted it requires seven different worksheets to determine eligibility (Section 1421)
  22. Imposes multiple penalties on those who marry, by reducing subsidies (and increasing taxes) for married couples when compared to two individuals cohabiting together (Sections 1401-02)
  23. Extends the Medicare “payroll tax” to unearned income for the first time ever, including new taxes on the sale of some homes (Section 1402)
  24. Impedes state flexibility by requiring Medicaid programs to offer a specific package of benefits, including benefits like family planning services (Sections 2001(a)(2), 2001(c), 1302(b), and 2303(c))
  25. Requires individuals to go to the doctor and get a prescription in order to spend their own Flexible Spending Account money on over-the-counter medicines (Section 9003)
  26. Expands the definition of “low-income” to make 63 percent of non-elderly Americans eligible for “low-income” subsidized insurance (Section 1401)
  27. Imposes a new tax on the makers of goods like pacemakers and hearing aids (Section 9009)
  28. Creates an insurance reimbursement scheme that could result in the federal government obtaining Americans’ medical records (Section 1343)
  29. Permits states to make individuals presumptively eligible for Medicaid for unlimited 60-day periods, thus allowing any individual to receive taxpayer-funded assistance ad infinitum (Section 2303(b))
  30. Allows individuals to purchase insurance on government exchanges – and to receive taxpayer-funded insurance subsidies – WITHOUT verifying their identity as American citizens (Section 1411)
  31. Gives $300 million in higher Medicaid reimbursements to one state as part of the infamous “Louisiana Purchase” – described by ABC News as “what…it take[s] to get a wavering senator to vote for health care reform” (Section 2006)
  32. Raises taxes on firms who cannot afford to buy coverage for their workers (Section 1513)
  33. Forces younger Americans to pay double-digit premium increases so that older workers can pay slightly less (Section 1201)
  34. Prohibits states from modifying their Medicaid programs to include things like modest anti-fraud protections (Section 2001)
  35. Includes a special provision increasing federal payments just for Tennessee (Section 1203(b))
  36. Allows individuals to purchase health insurance across state lines – but only if politicians and bureaucrats agree to allow citizens this privilege (Section 1333)
  37. Allows the HHS Secretary and federal bureaucrats to grant waivers exempting people from Obamacare’s onerous mandates, over half of which have gone to members of union plans (Section 1001)
  38. Creates a pseudo-government-run plan overseen by the federal government (Section 1334)
  39. Removes a demonstration project designed to force government-run Medicare to compete on a level playing field with private plans (Section 1102(f))
  40. Gives the Secretary of HHS an UNLIMITED amount of federal funds to spend funding state insurance Exchanges (Section 1311(a))
  41. Creates a grant program that could be used by liberal groups like ACORN or AARP to conduct “public education activities” surrounding Obamacare (Section 1311(i))
  42. Applies new federal mandates to pre-Obamacare insurance policies, thus proving that you CAN’T keep the insurance plan you had – and liked – before the law passed (Sections 2301 and 10103)
  43. Prohibits individuals harmed by federal bureaucrats from challenging those decisions, either in court or through regulatory processes (Sections 3001, 3003, 3007, 3008, 3021, 3022, 3025, 3133, 3403, 5501, 6001, and 6401)
  44. Earmarks $100 million for “construction of a health care facility,” a “sweetheart deal” inserted by a Democrat Senator trying to win re-election (Section 10502)
  45. Puts yet another Medicaid unfunded mandate on states, by raising payments to primary care physicians, but only for two years, forcing states to come up with another method of funding this unsustainable promise when federal funding expires (Section 1202)
  46. Imposes price controls that have had the effect of costing jobs in the short time since they were first implemented (Section 1001)
  47. Prohibits individuals from spending federal insurance subsidies outside government-approved Exchanges (Section 1401(a))
  48. Provides a special increase in federal hospital payments just for Hawaii (Section 10201(e)(1))
  49. Imposes new reporting requirements that will cost businesses millions of dollars, and affect thousands of restaurants and other establishments across the country (Section 4205)
  50. Codifies 159 new boards, bureaucracies, and programs

The Supreme Court may have struck some of these onerous provisions, but the only way to ensure that ALL these provisions are eliminated – and never return – is to repeal ALL of this unconstitutional law immediately.

White House Budget Summary

Overall, the budget:

  • Proposes $362 billion in savings, yet calls for $429 billion in unpaid-for spending due to the Medicare physician reimbursement “doc fix” – thus resulting in a net increase in the deficit. (The $429 billion presumes a ten year freeze of Medicare physician payments; however, the budget does NOT propose ways to pay for this new spending.)
  • Proposes few structural reforms to Medicare; those that are included – weak as they are – are not scheduled to take effect until 2017, well after President Obama leaves office.  If the proposals are so sound, why the delay?
  • Requests just over $1 billion for program management at the Centers for Medicare and Medicaid Services, of which the vast majority – $864 million – would be used to implement the health care law.
  • Requests more than half a billion dollars for comparative effectiveness research, which many may be concerned could result in government bureaucrats imposing cost-based limits on treatments.
  • Includes mandatory proposals in the budget that largely track the September deficit proposal to Congress, with a few exceptions.  The budget does NOT include proposals to reduce Medicare frontier state payments, even though this policy was included in the September proposal.  The budget also does not include recovery provisions regarding Medicare Advantage payments to insurers; however, the Administration has indicated they intend to implement this provision administratively.
  • Does not include a proposal relating to Medicaid eligibility levels included in the September submission, as that proposal was enacted into law in November (P.L. 112-56).

 

Discretionary Spending

When compared to Fiscal Year 2012 appropriated amounts, the budget calls for the following changes in discretionary spending by major HHS divisions (tabulated by budget authority):

  • $12 million (0.5%) increase for the Food and Drug Administration – along with a separate proposed $643 million increase in FDA user fees;
  • $138 million (2.2%) decrease for the Health Services and Resources Administration;
  • $116 million (2.7%) increase for the Indian Health Service;
  • $664 million (11.5%) decrease for the Centers for Disease Control;
  • No net change in funding for the National Institutes of Health;
  • $1 billion (26.2%) increase for the discretionary portion of the Centers for Medicare and Medicaid Services program management account; and
  • $29 million (5.0%) increase for the discretionary Health Care Fraud and Abuse Control fund.

With regard to the above numbers for CDC and HRSA, note that these are discretionary numbers only.  The Administration’s budget also would allocate additional $1.25 billion in mandatory spending from the new Prevention and Public Health “slush fund” created in the health care law, likely eliminating any real budgetary savings (despite the appearance of same above).

Other Health Care Points of Note

Tax Credit:  The Treasury Green Book proposes expanding the small business health insurance tax credit included in the health care law.   Specifically, the budget would expand the number of employers eligible for the credit to include all employers with up to 50 full-time workers; firms with under 20 workers would be eligible for the full credit.  (Currently those levels are 25 and 10 full-time employees, respectively.)  The budget also changes the coordination of the two phase-outs based on a firm’s average wage and number of employees, with the changes designed to make more companies eligible for a larger credit.  According to OMB, these changes would cost $14 billion over ten years.  Many may view this proposal as a tacit admission that the credit included in the law was a failure, because its limited reach and complicated nature – firms must fill out seven worksheets to determine their eligibility – have deterred American job creators from receiving this subsidy.

Comparative Effectiveness Research:  The budget proposes a total of $599 million in funding for comparative effectiveness research.  Only $78 million of this money comes from existing funds included in the health care law – meaning the Administration has proposed discretionary spending of more than $500 million on comparative effectiveness research.  Some have previously expressed concerns that this research could be used to restrict access to treatments perceived as too costly by federal bureaucrats.  It is also worth noting that this new $520 million in research funding would NOT be subject to the anti-rationing provisions included in the health care law.  Section 218 of this year’s omnibus appropriations measure included a prohibition on HHS using funds to engage in cost-effectiveness research, a provision which this budget request would presumably seek to overturn.

Obamacare Implementation Funding and Personnel:  As previously noted, the budget includes more than $1 billion in discretionary spending increases for the Centers for Medicare and Medicaid Services, which the HHS Budget in Brief claims would be used to “continue implementing [Obamacare], including Exchanges.”  This funding would finance 256 new bureaucrats within CMS, many of whom would likely be used to implement the law.  Overall, the HHS budget proposes an increase of 1,393 full-time equivalent positions within the bureaucracy.

Specific details of the $1 billion in implementation funding include:

  • $290 million for “consumer support in the private marketplace;”
  • $549 million for “general IT systems and other support,” including funding for the federally-funded Exchange, for which the health law itself did not appropriate funding;
  • $18 million for updates to healthcare.gov;
  • $15 million to oversee the medical loss ratio regulations; and
  • $30 million for consumer assistance grants.

Exchange Funding:  The budget envisions HHS spending $1.1 billion on Exchange grants in 2013, a $180 million increase over the current fiscal year.  The health care law provides the Secretary with an unlimited amount of budget authority to fund state Exchange grants through 2015.  However, other reports have noted that the Secretary does NOT have authority to use these funds to construct a federal Exchange, in the event some states choose not to implement their own state-based Exchanges.

Abstinence Education Funding:  The budget proposes eliminating the abstinence education funding program, and converting those funds into a new pregnancy prevention program.

Medicare Proposals (Total savings of $292.2 Billion)

Bad Debts:  Reduces bad debt payments to providers – for unpaid cost-sharing owed by beneficiaries – from 70 percent down to 25 percent over three years, beginning in 2013.  The Fiscal Commission had made similar recommendations in its final report.  Saves $35.9 billion.

Medical Education Payments:  Reduces the Indirect Medical Education adjustment paid to teaching hospitals by 10 percent beginning in 2014, saving $9.7 billion.  Previous studies by the Medicare Payment Advisory Committee (MedPAC) have indicated that IME payments to teaching hospitals may be greater than the actual costs the hospitals incur.

Rural Payments:  Reduces critical access hospital payments from 101% of costs to 100% of costs, saving $1.4 billion, and prohibits hospitals fewer than 10 miles away from the nearest hospital from receiving a critical access hospital designation, saving $590 million.  The budget does NOT include a proposal to end add-on payments for providers in frontier states, which was included in the President’s September deficit proposal.

Post-Acute Care:  Reduces various acute-care payment updates (details not specified) during the years 2013 through 2022, saving $56.7 billion – a significant increase compared to the $32.5 billion in savings under the President’s September deficit proposal.  Equalizes payment rates between skilled nursing facilities and inpatient rehabilitation facilities, saving $2 billion.  Increases the minimum percentage of inpatient rehabilitation facility patients that require intensive rehabilitation from 60 percent to 75 percent, saving $2.3 billion.  Reduces skilled nursing facility payments by up to 3%, beginning in 2015, for preventable readmissions, saving $2 billion.

Pharmaceutical Price Controls:  Expands Medicaid price controls to dual eligible and low-income subsidy beneficiaries participating in Part D, saving $155.6 billion according to OMB.  Some have expressed concerns that further expanding government-imposed price controls to prescription drugs could harm innovation and the release of new therapies that could help cure diseases.

Anti-Fraud Provisions:  Assumes $450 million in savings from various anti-fraud provisions, including limiting the discharge of debt in bankruptcy proceedings associated with fraudulent activities.

EHR Penalties:  Re-directs Medicare reimbursement penalties against physicians who do not engage in electronic prescribing beginning in 2020 back into the Medicare program.  The “stimulus” legislation that enacted the health IT provisions had originally required that penalties to providers be placed into the Medicare Improvement Fund; the budget would instead re-direct those revenues into the general fund, to finance the “doc fix” and related provisions.  OMB now scores this proposal as saving $590 million; when included in last year’s budget back in February, these changes were scored as saving $3.2 billion.

Imaging:  Reduces imaging payments by assuming a higher level of utilization for certain types of equipment, saving $400 million.  Also imposes prior authorization requirements for advanced imaging; no savings are assumed, a change from the September deficit proposal, which said prior authorization would save $900 million.

Additional Means Testing:  Increases means tested premiums under Parts B and D by 15%, beginning in 2017.  Freezes the income thresholds at which means testing applies until 25 percent of beneficiaries are subject to such premiums.  Saves $27.6 billion over ten years, and presumably more thereafter, as additional seniors would hit the means testing threshold, subject them to higher premiums.

Medicare Deductible Increase:  Increases Medicare Part B deductible by $25 in 2017, 2019, and 2021 – but for new beneficiaries only; “current beneficiaries or near retirees [not defined] would not be subject to the revised deductible.”  Saves $2 billion.

Home Health Co-Payment:  Beginning in 2017, introduces a home health co-payment of $100 per episode for new beneficiaries only, in cases where an episode lasts five or more visits and is NOT proceeded by a hospital stay.  MedPAC has previously recommended introducing home health co-payments as a way to ensure appropriate utilization.  Saves $350 million.

Medigap Surcharge:  Imposes a Part B premium surcharge equal to about 15 percent of the average Medigap premium – or about 30 percent of the Part B premium – for seniors with Medigap supplemental insurance that provides first dollar coverage.  Applies beginning in 2017 to new beneficiaries only.  A study commissioned by MedPAC previously concluded that first dollar Medigap coverage induces beneficiaries to consume more medical services, thus increasing costs for the Medicare program and federal taxpayers.  Saves $2.5 billion.

Lower Caps on Medicare Spending:  Section 3403 of the health care law established an Independent Payment Advisory Board tasked with limiting Medicare spending to the growth of the economy plus one percentage point (GDP+1) in 2018 and succeeding years.  The White House proposal would reduce this target to GDP+0.5 percent.  This approach has two potential problems:

  • First, under the Congressional Budget Office’s most recent baseline, IPAB recommendations would not be triggered at all – so it’s unclear whether the new, lower target level would actually generate measurable budgetary savings.  (In August 2010, CBO concluded an IPAB with an overall cap of GDP+1 would yield $13.8 billion in savings through 2020 – not enough to make a measurable impact on a program spending $500 billion per year.)
  • Second, the Medicare actuary has previously written that the spending adjustments contemplated by IPAB and the health care law “are unlikely to be sustainable on a permanent annual basis” and “very challenging” – problems that would be exacerbated by utilizing a slower target rate for Medicare spending growth.

According to the budget, this proposal would NOT achieve additional deficit savings.

Medicaid and Other Health Proposals (Total savings of $70.4 Billion)

Medicaid Provider Taxes:  Reduces limits on Medicaid provider tax thresholds, beginning in 2015; the tax threshold would be reduced over a three year period, to 3.5 percent in 2017 and future years.  State provider taxes are a financing method whereby states impose taxes on medical providers, and use these provider tax revenues to obtain additional federal Medicaid matching funds, thereby increasing the federal share of Medicaid expenses paid while decreasing the state share of expenses.  The Tax Relief and Health Care Act of 2006, enacted by a Republican Congress, capped the level of Medicaid provider taxes, and the Bush Administration proposed additional rules to reform Medicaid funding rules – rules that were blocked by the Democrat-run 110th Congress.  However, there is bipartisan support for addressing ways in which states attempt to “game” the Medicaid system, through provider taxes and other related methods, to obtain unwarranted federal matching funds – the liberal Center for Budget and Policy Priorities previously wrote about a series of “Rube Goldberg-like accounting arrangements” that “do not improve the quality of health care provided” and “frequently operate in a manner that siphons extra federal money to state coffers without affecting the provision of health care.”  This issue was also addressed in the fiscal commission’s report, although the commission exceeded the budget proposals by suggesting that Congress enact legislation “restricting and eventually eliminating” provider taxes, saving $44 billion.  OMB scores this proposal as saving $21.8 billion.

Blended Rate:  Proposes “replac[ing]…complicated federal matching formulas” in Medicaid “with a single matching rate specific to each state that automatically increases if a recession forces enrollment and state costs to rise.”  Details are unclear, but the Administration claims $17.9 billion in savings from this proposal – much less than the $100 billion figure bandied about in previous reports last summer.  It is also worth noting that the proposal could actually INCREASE the deficit, if a prolonged recession triggers the automatic increases in the federal Medicaid match referenced in the proposal.  On a related note, the budget once again ignores the governors’ multiple requests for flexibility from the mandates included in the health care law – unfunded mandates on states totaling at least $118 billion.

Transitional Medical Assistance/QI Program:  Provides for temporary extensions of the Transitional Medical Assistance program, which provides Medicaid benefits for low-income families transitioning from welfare to work, along with the Qualifying Individual program, which provides assistance to low-income seniors in paying Medicare premiums.  The extensions cost $815 million and $1.7 billion, respectively.

Limit Durable Medical Equipment Reimbursement:  Caps Medicaid reimbursements for durable medical equipment (DME) at Medicare rates, beginning in 2013.  The health care law extended and expanded a previous Medicare competitive bidding demonstration project included in the Medicare Modernization Act, resulting in savings to the Medicare program.  This proposal, by capping Medicaid reimbursements for DME at Medicare levels, would attempt to extend those savings to the Medicaid program.  OMB now scores this proposal as saving $3 billion; when included in the President’s budget last year, these changes were scored as saving $6.4 billion.

Rebase Medicaid Disproportionate Share Hospital Payments:  In 2021 and 2022, reallocates Medicaid DSH payments to hospitals treating low-income patients, based on states’ actual 2020 allotments (as amended and reduced by the health care law).  Saves $8.3 billion.

Medicaid Anti-Fraud Savings:  Assumes $3.2 billion in savings from a variety of Medicaid anti-fraud provisions, largely through tracking and enforcement of various provisions related to pharmaceuticals.  Included in this amount are proposals that would remove exceptions to the requirement that Medicaid must reject payments when another party is liable for a medical claim.

Flexibility on Benchmark Plans:  Proposes some new flexibility for states to require Medicaid “benchmark” plan coverage for non-elderly, non-disabled adults – but ONLY those with incomes above 133 percent of the federal poverty level (i.e., NOT the new Medicaid population obtaining coverage under the health care law).  No savings assumed.

“Pay-for-Delay:”  Prohibits brand-name pharmaceutical manufacturers from entering into arrangements that would delay the availability of new generic drugs.  Some Members have previously expressed concerns that these provisions would harm innovation, and actually impede the incentives to generic manufacturers to bring cost-saving generic drugs on the market.  OMB scores this proposal as saving $11 billion.

Follow-on Biologics:  Reduces to seven years the period of exclusivity for follow-on biologics.  Current law provides for a twelve-year period of exclusivity, based upon an amendment to the health care law that was adopted on a bipartisan basis in both the House and Senate (one of the few substantive bipartisan amendments adopted).  Some Members have expressed concern that reducing the period of exclusivity would harm innovation and discourage companies from developing life-saving treatments.  OMB scores this proposal as saving $3.8 billion.

FEHB Contracting:  Proposes streamlining pharmacy benefit contracting within the Federal Employee Health Benefits program, by centralizing pharmaceutical benefit contracting within the Office of Personnel Management (OPM).  Some individuals, noting that OPM is also empowered to create “multi-state plans” as part of the health care overhaul, may be concerned that these provisions could be part of a larger plan to make OPM the head of a de facto government-run health plan.  OMB scores this proposal as saving $1.7 billion.

Prevention “Slush Fund:”  Reduces spending by $4 billion on the Prevention and Public Health Fund created in the health care law.  Some Members have previously expressed concern that this fund would be used to fund projects like jungle gyms and bike paths, questionable priorities for the use of federal taxpayer dollars in a time of trillion-dollar deficits.

State Waivers:  Accelerates from 2017 to 2014 the date under which states can submit request for waivers of SOME of the health care law’s requirements to HHS.  While supposedly designed to increase flexibility, even liberal commentators have agreed that under the law’s state waiver programcritics of Obama’s proposal have a point: It wouldn’t allow to enact the sorts of health care reforms they would prefer” and thatconservatives can’t do any better – at least not under these rules.”  The proposal states that “the Administration is committed to the budget neutrality of these waivers;” however, the plan allocates $4 billion in new spending “to account for the possibility that CBO will estimate costs for this proposal.”

Implementation “Slush Fund:”  Proposes $400 million in new spending for HHS to implement the proposals listed above.

208 Things in Obamacare that Obama and Democrats Support

Last week, former HELP Committee staffer John McDonough wrote a list of “50 provisions I ask the media to ask Romney et al. if they are committed to repealing as President.”  McDonough noted that “there are [Obamacare] provisions opponents could pick out to create an alternative list for elimination.”

We here at RPC know a challenge when we hear one; our list is submitted below, with sections from the statute duly noted.  Remember when reading this list:  We KNOW that President Obama and Democrats all support these provisions in Obamacare – because they all voted to enact them into law.  So members of the media can readily ask President Obama and Democrat Members of Congress why they supported a law that…

  1. Imposes $800 billion in tax increases, including no fewer than 12 separate provisions breaking candidate Obama’s “firm pledge” during his campaign that he would not raise “any of your taxes” (Sections 9001-9016)?
  2. Forces Americans to purchase a product for the first time ever (Section 1501)?
  3. Creates a board of 15 unelected and unaccountable bureaucrats to make binding rulings on how to reduce Medicare spending (Section 3403)?
  4. Pays over $800 billion in subsidies straight to health insurance companies (Sections 1401, 1402, and 1412)?
  5. Requires all individuals to buy government-approved health insurance plans, imposing new mandates that will raise individual insurance premiums by an average of $2,100 per family (Section 1302)?
  6. Forces seniors to lose their current health care, by enacting Medicare Advantage cuts that by 2017 will cut enrollment in half, and cut plan choices by two-thirds (Section 3201)?
  7. Imposes a 40 percent tax on health benefits, a direct contradiction of Barack Obama’s campaign promises (Section 9001)?
  8. Relies upon government bureaucrats to “issue guidance on best practices of plain language writing” (Section 1311(e)(3)(B))?
  9. Provides special benefits to residents of Libby, Montana – home of Max Baucus, the powerful Chairman of the Senate Finance Committee, who helped write the law even though he says he hasn’t read it (Section 10323)?
  10. Imposes what a Democrat Governor called the “mother of all unfunded mandates” – new, Washington-dictated requirements of at least $118 billion – at a time when states already face budget deficits totaling a collective $175 billion (Section 2001)?
  11. Imposes reductions in Medicare spending that, according to the program’s non-partisan actuary, would cause 40 percent of all Medicare providers to become unprofitable, and could lead to their exit from the program (Section 3401)?
  12. Raises premiums on more than 17 million seniors participating in Medicare Part D, so that Big Pharma can benefit from its “rock-solid deal” struck behind closed doors with President Obama and Congressional Democrats (Section 3301)?
  13. Creates an institute to undertake research that, according to one draft Committee report prepared by Democrats, could mean that “more expensive [treatments] will no longer be prescribed” (Section 6301)?
  14. Creates a multi-billion dollar “slush fund” doled out solely by federal bureaucrats, which has already been used to fund things like bike paths (Section 4002)?
  15. Subjects states to myriad new lawsuits, by forcing them to assume legal liability for delivering services to Medicaid patients for the first time in that program’s history (Section 2304)?
  16. Permits taxpayer dollars to flow to health plans that fund abortion, in a sharp deviation from prior practice under Democrat and Republican Administrations (Section 1303)?
  17. Empowers bureaucrats on a board that has ruled against mammograms and against prostate cancer screenings to make binding determinations about what types of preventive services should be covered (Sections 2713 and 4104)?
  18. Precludes poor individuals from having a choice of health care plans by automatically dumping them in the Medicaid program (Section 1413(a))?
  19. Creates a new entitlement program that one Democrat called “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of” – a scheme so unsustainable even the Administration was forced to admit it would not work (Section 8002)?
  20. Provides $5 billion in taxpayer dollars to a fund that has largely served to bail out unions and other organizations who made unsustainable health care promises to retirees that they cannot afford (Section 1102)?
  21. Creates a tax credit so convoluted it requires seven different worksheets to determine eligibility (Section 1421)?
  22. Imposes multiple penalties on those who marry, by reducing subsidies (and increasing taxes) for married couples when compared to two individuals cohabiting together (Sections 1401-02)?
  23. Extends the Medicare “payroll tax” to unearned income for the first time ever, including new taxes on the sale of some homes (Section 1402)?
  24. Impedes state flexibility by requiring Medicaid programs to offer a specific package of benefits, including benefits like family planning services (Sections 2001(a)(2), 2001(c), 1302(b), and 2303(c))?
  25. Requires individuals to go to the doctor and get a prescription in order to spend their own Flexible Spending Account money on over-the-counter medicines (Section 9003)?
  26. Expands the definition of “low-income” to make 63 percent of non-elderly Americans eligible for “low-income” subsidized insurance (Section 1401)?
  27. Imposes a new tax on the makers of goods like pacemakers and hearing aids (Section 9009)?
  28. Creates an insurance reimbursement scheme that could result in the federal government obtaining Americans’ medical records (Section 1343)?
  29. Permits states to make individuals presumptively eligible for Medicaid for unlimited 60-day periods, thus allowing any individual to receive taxpayer-funded assistance ad infinitum (Section 2303(b))?
  30. Allows individuals to purchase insurance on government exchanges – and to receive taxpayer-funded insurance subsidies – WITHOUT verifying their identity as American citizens (Section 1411)?
  31. Gives $300 million in higher Medicaid reimbursements to one state as part of the infamous “Louisiana Purchase” – described by ABC News as “what…it take[s] to get a wavering senator to vote for health care reform” (Section 2006)?
  32. Raises taxes on firms who cannot afford to buy coverage for their workers (Section 1513)?
  33. Forces younger Americans to pay double-digit premium increases so that older workers can pay slightly less (Section 1201)?
  34. Prohibits states from modifying their Medicaid programs to include things like modest anti-fraud protections (Section 2001)?
  35. Includes a special provision increasing federal payments just for Tennessee (Section 1203(b))?
  36. Allows individuals to purchase health insurance across state lines – but only if politicians and bureaucrats agree to allow citizens this privilege (Section 1333)?
  37. Allows the HHS Secretary and federal bureaucrats to grant waivers exempting people from Obamacare’s onerous mandates, over half of which have gone to members of union plans (Section 1001)?
  38. Creates a pseudo-government-run plan overseen by the federal government (Section 1334)?
  39. Removes a demonstration project designed to force government-run Medicare to compete on a level playing field with private plans (Section 1102(f))?
  40. Gives the Secretary of HHS an UNLIMITED amount of federal funds to spend funding state insurance Exchanges (Section 1311(a))?
  41. Creates a grant program that could be used by liberal groups like ACORN or AARP to conduct “public education activities” surrounding Obamacare (Section 1311(i))?
  42. Applies new federal mandates to pre-Obamacare insurance policies, thus proving that you CAN’T keep the insurance plan you had – and liked – before the law passed (Sections 2301 and 10103)?
  43. Prohibits individuals harmed by federal bureaucrats from challenging those decisions, either in court or through regulatory processes (Sections 3001, 3003, 3007, 3008, 3021, 3022, 3025, 3133, 3403, 5501, 6001, AND 6401)?
  44. Earmarks $100 million for “construction of a health care facility,” a “sweetheart deal” inserted by a Democrat Senator trying to win re-election (Section 10502)?
  45. Puts yet another Medicaid unfunded mandate on states, by raising payments to primary care physicians, but only for two years, forcing states to come up with another method of funding this unsustainable promise when federal funding expires (Section 1202)?
  46. Imposes price controls that have had the effect of costing jobs in the short time since they were first implemented (Section 1001)?
  47. Prohibits individuals from spending federal insurance subsidies outside government-approved Exchanges (Section 1401(a))?
  48. Provides a special increase in federal hospital payments just for Hawaii (Section 10201(e)(1))?
  49. Imposes new reporting requirements that will cost businesses millions of dollars, and affect thousands of restaurants and other establishments across the country (Section 4205)?

And instead of including a 50th item on our list, we’re going to include 159 separate items.  These are the 159 new boards, bureaucracies, and programs created by Obamacare.  You can find the list below, or here.

No matter which way you look at it, this list provides 208 easy reasons why the American people still continue to reject Democrats’ unpopular 2700-page health care law.

 

Obamacare’s 159 New Boards, Bureaucracies, Commissions, and Programs

  1. Grant program for consumer assistance offices (Section 1002, p. 37)
  2. Grant program for states to monitor premium increases (Section 1003, p. 42)
  3. Committee to review administrative simplification standards (Section 1104, p. 71)
  4. Demonstration program for state wellness programs (Section 1201, p. 93)
  5. Grant program to establish state Exchanges (Section 1311(a), p. 130)
  6. State American Health Benefit Exchanges (Section 1311(b), p. 131)
  7. Exchange grants to establish consumer navigator programs (Section 1311(i), p. 150)
  8. Grant program for state cooperatives (Section 1322, p. 169)
  9. Advisory board for state cooperatives (Section 1322(b)(3), p. 173)
  10. Private purchasing council for state cooperatives (Section 1322(d), p. 177)
  11. State basic health plan programs (Section 1331, p. 201)
  12. State-based reinsurance program (Section 1341, p. 226)
  13. Program of risk corridors for individual and small group markets (Section 1342, p. 233)
  14. Program to determine eligibility for Exchange participation (Section 1411, p. 267)
  15. Program for advance determination of tax credit eligibility (Section 1412, p. 288)
  16. Grant program to implement health IT enrollment standards (Section 1561, p. 370)
  17. Federal Coordinated Health Care Office for dual eligible beneficiaries (Section 2602, p. 512)
  18. Medicaid quality measurement program (Section 2701, p. 518)
  19. Medicaid health home program for people with chronic conditions, and grants for planning same (Section 2703, p. 524)
  20. Medicaid demonstration project to evaluate bundled payments (Section 2704, p. 532)
  21. Medicaid demonstration project for global payment system (Section 2705, p. 536)
  22. Medicaid demonstration project for accountable care organizations (Section 2706, p. 538)
  23. Medicaid demonstration project for emergency psychiatric care (Section 2707, p. 540)
  24. Grant program for delivery of services to individuals with postpartum depression (Section 2952(b), p. 591)
  25. State allotments for grants to promote personal responsibility education programs (Section 2953, p. 596)
  26. Medicare value-based purchasing program (Section 3001(a), p. 613)
  27. Medicare value-based purchasing demonstration program for critical access hospitals (Section 3001(b), p. 637)
  28. Medicare value-based purchasing program for skilled nursing facilities (Section 3006(a), p. 666)
  29. Medicare value-based purchasing program for home health agencies (Section 3006(b), p. 668)
  30. Interagency Working Group on Health Care Quality (Section 3012, p. 688)
  31. Grant program to develop health care quality measures (Section 3013, p. 693)
  32. Center for Medicare and Medicaid Innovation (Section 3021, p. 712)
  33. Medicare shared savings program (Section 3022, p. 728)
  34. Medicare pilot program on payment bundling (Section 3023, p. 739)
  35. Independence at home medical practice demonstration program (Section 3024, p. 752)
  36. Program for use of patient safety organizations to reduce hospital readmission rates (Section 3025(b), p. 775)
  37. Community-based care transitions program (Section 3026, p. 776)
  38. Demonstration project for payment of complex diagnostic laboratory tests (Section 3113, p. 800)
  39. Medicare hospice concurrent care demonstration project (Section 3140, p. 850)
  40. Independent Payment Advisory Board (Section 3403, p. 982)
  41. Consumer Advisory Council for Independent Payment Advisory Board (Section 3403, p. 1027)
  42. Grant program for technical assistance to providers implementing health quality practices (Section 3501, p. 1043)
  43. Grant program to establish interdisciplinary health teams (Section 3502, p. 1048)
  44. Grant program to implement medication therapy management (Section 3503, p. 1055)
  45. Grant program to support emergency care pilot programs (Section 3504, p. 1061)
  46. Grant program to promote universal access to trauma services (Section 3505(b), p. 1081)
  47. Grant program to develop and promote shared decision-making aids (Section 3506, p. 1088)
  48. Grant program to support implementation of shared decision-making (Section 3506, p. 1091)
  49. Grant program to integrate quality improvement in clinical education (Section 3508, p. 1095)
  50. Health and Human Services Coordinating Committee on Women’s Health (Section 3509(a), p. 1098)
  51. Centers for Disease Control Office of Women’s Health (Section 3509(b), p. 1102)
  52. Agency for Healthcare Research and Quality Office of Women’s Health (Section 3509(e), p. 1105)
  53. Health Resources and Services Administration Office of Women’s Health (Section 3509(f), p. 1106)
  54. Food and Drug Administration Office of Women’s Health (Section 3509(g), p. 1109)
  55. National Prevention, Health Promotion, and Public Health Council (Section 4001, p. 1114)
  56. Advisory Group on Prevention, Health Promotion, and Integrative and Public Health (Section 4001(f), p. 1117)
  57. Prevention and Public Health Fund (Section 4002, p. 1121)
  58. Community Preventive Services Task Force (Section 4003(b), p. 1126)
  59. Grant program to support school-based health centers (Section 4101, p. 1135)
  60. Grant program to promote research-based dental caries disease management (Section 4102, p. 1147)
  61. Grant program for States to prevent chronic disease in Medicaid beneficiaries (Section 4108, p. 1174)
  62. Community transformation grants (Section 4201, p. 1182)
  63. Grant program to provide public health interventions (Section 4202, p. 1188)
  64. Demonstration program of grants to improve child immunization rates (Section 4204(b), p. 1200)
  65. Pilot program for risk-factor assessments provided through community health centers (Section 4206, p. 1215)
  66. Grant program to increase epidemiology and laboratory capacity (Section 4304, p. 1233)
  67. Interagency Pain Research Coordinating Committee (Section 4305, p. 1238)
  68. National Health Care Workforce Commission (Section 5101, p. 1256)
  69. Grant program to plan health care workforce development activities (Section 5102(c), p. 1275)
  70. Grant program to implement health care workforce development activities (Section 5102(d), p. 1279)
  71. Pediatric specialty loan repayment program (Section 5203, p. 1295)
  72. Public Health Workforce Loan Repayment Program (Section 5204, p. 1300)
  73. Allied Health Loan Forgiveness Program (Section 5205, p. 1305)
  74. Grant program to provide mid-career training for health professionals (Section 5206, p. 1307)
  75. Grant program to fund nurse-managed health clinics (Section 5208, p. 1310)
  76. Grant program to support primary care training programs (Section 5301, p. 1315)
  77. Grant program to fund training for direct care workers (Section 5302, p. 1322)
  78. Grant program to develop dental training programs (Section 5303, p. 1325)
  79. Demonstration program to increase access to dental health care in underserved communities (Section 5304, p. 1331)
  80. Grant program to promote geriatric education centers (Section 5305, p. 1334)
  81. Grant program to promote health professionals entering geriatrics (Section 5305, p. 1339)
  82. Grant program to promote training in mental and behavioral health (Section 5306, p. 1344)
  83. Grant program to promote nurse retention programs (Section 5309, p. 1354)
  84. Student loan forgiveness for nursing school faculty (Section 5311(b), p. 1360)
  85. Grant program to promote positive health behaviors and outcomes (Section 5313, p. 1364)
  86. Public Health Sciences Track for medical students (Section 5315, p. 1372)
  87. Primary Care Extension Program to educate providers (Section 5405, p. 1404)
  88. Grant program for demonstration projects to address health workforce shortage needs (Section 5507, p. 1442)
  89. Grant program for demonstration projects to develop training programs for home health aides (Section 5507, p. 1447)
  90. Grant program to establish new primary care residency programs (Section 5508(a), p. 1458)
  91. Program of payments to teaching health centers that sponsor medical residency training (Section 5508(c), p. 1462)
  92. Graduate nurse education demonstration program (Section 5509, p. 1472)
  93. Grant program to establish demonstration projects for community-based mental health settings (Section 5604, p. 1486)
  94. Commission on Key National Indicators (Section 5605, p. 1489)
  95. Quality assurance and performance improvement program for skilled nursing facilities (Section 6102, p. 1554)
  96. Special focus facility program for skilled nursing facilities (Section 6103(a)(3), p. 1561)
  97. Special focus facility program for nursing facilities (Section 6103(b)(3), p. 1568)
  98. National independent monitor pilot program for skilled nursing facilities and nursing facilities (Section 6112, p. 1589)
  99. Demonstration projects for nursing facilities involved in the culture change movement (Section 6114, p. 1597)
  100. Patient-Centered Outcomes Research Institute (Section 6301, p. 1619)
  101. Standing methodology committee for Patient-Centered Outcomes Research Institute (Section 6301, p. 1629)
  102. Board of Governors for Patient-Centered Outcomes Research Institute (Section 6301, p. 1638)
  103. Patient-Centered Outcomes Research Trust Fund (Section 6301(e), p. 1656)
  104. Elder Justice Coordinating Council (Section 6703, p. 1773)
  105. Advisory Board on Elder Abuse, Neglect, and Exploitation (Section 6703, p. 1776)
  106. Grant program to create elder abuse forensic centers (Section 6703, p. 1783)
  107. Grant program to promote continuing education for long-term care staffers (Section 6703, p. 1787)
  108. Grant program to improve management practices and training (Section 6703, p. 1788)
  109. Grant program to subsidize costs of electronic health records (Section 6703, p. 1791)
  110. Grant program to promote adult protective services (Section 6703, p. 1796)
  111. Grant program to conduct elder abuse detection and prevention (Section 6703, p. 1798)
  112. Grant program to support long-term care ombudsmen (Section 6703, p. 1800)
  113. National Training Institute for long-term care surveyors (Section 6703, p. 1806)
  114. Grant program to fund State surveys of long-term care residences (Section 6703, p. 1809)
  115. CLASS Independence Fund (Section 8002, p. 1926)
  116. CLASS Independence Fund Board of Trustees (Section 8002, p. 1927)
  117. CLASS Independence Advisory Council (Section 8002, p. 1931)
  118. Personal Care Attendants Workforce Advisory Panel (Section 8002(c), p. 1938)
  119. Multi-state health plans offered by Office of Personnel Management (Section 10104(p), p. 2086)
  120. Advisory board for multi-state health plans (Section 10104(p), p. 2094)
  121. Pregnancy Assistance Fund (Section 10212, p. 2164)
  122. Value-based purchasing program for ambulatory surgical centers (Section 10301, p. 2176)
  123. Demonstration project for payment adjustments to home health services (Section 10315, p. 2200)
  124. Pilot program for care of individuals in environmental emergency declaration areas (Section 10323, p. 2223)
  125. Grant program to screen at-risk individuals for environmental health conditions (Section 10323(b), p. 2231)
  126. Pilot programs to implement value-based purchasing (Section 10326, p. 2242)
  127. Grant program to support community-based collaborative care networks (Section 10333, p. 2265)
  128. Centers for Disease Control Office of Minority Health (Section 10334, p. 2272)
  129. Health Resources and Services Administration Office of Minority Health (Section 10334, p. 2272)
  130. Substance Abuse and Mental Health Services Administration Office of Minority Health (Section 10334, p. 2272)
  131. Agency for Healthcare Research and Quality Office of Minority Health (Section 10334, p. 2272)
  132. Food and Drug Administration Office of Minority Health (Section 10334, p. 2272)
  133. Centers for Medicare and Medicaid Services Office of Minority Health (Section 10334, p. 2272)
  134. Grant program to promote small business wellness programs (Section 10408, p. 2285)
  135. Cures Acceleration Network (Section 10409, p. 2289)
  136. Cures Acceleration Network Review Board (Section 10409, p. 2291)
  137. Grant program for Cures Acceleration Network (Section 10409, p. 2297)
  138. Grant program to promote centers of excellence for depression (Section 10410, p. 2304)
  139. Advisory committee for young women’s breast health awareness education campaign (Section 10413, p. 2322)
  140. Grant program to provide assistance to provide information to young women with breast cancer (Section 10413, p. 2326)
  141. Interagency Access to Health Care in Alaska Task Force (Section 10501, p. 2329)
  142. Grant program to train nurse practitioners as primary care providers (Section 10501(e), p. 2332)
  143. Grant program for community-based diabetes prevention (Section 10501(g), p. 2337)
  144. Grant program for providers who treat a high percentage of medically underserved populations (Section 10501(k), p. 2343)
  145. Grant program to recruit students to practice in underserved communities (Section 10501(l), p. 2344)
  146. Community Health Center Fund (Section 10503, p. 2355)
  147. Demonstration project to provide access to health care for the uninsured at reduced fees (Section 10504, p. 2357)
  148. Demonstration program to explore alternatives to tort litigation (Section 10607, p. 2369)
  149. Indian Health demonstration program for chronic shortages of health professionals (S. 1790, Section 112, p. 24)*
  150. Office of Indian Men’s Health (S. 1790, Section 136, p. 71)*
  151. Indian Country modular component facilities demonstration program (S. 1790, Section 146, p. 108)*
  152. Indian mobile health stations demonstration program (S. 1790, Section 147, p. 111)*
  153. Office of Direct Service Tribes (S. 1790, Section 172, p. 151)*
  154. Indian Health Service mental health technician training program (S. 1790, Section 181, p. 173)*
  155. Indian Health Service program for treatment of child sexual abuse victims (S. 1790, Section 181, p. 192)*
  156. Indian Health Service program for treatment of domestic violence and sexual abuse (S. 1790, Section 181, p. 194)*
  157. Indian youth telemental health demonstration project (S. 1790, Section 181, p. 204)*
  158. Indian youth life skills demonstration project (S. 1790, Section 181, p. 220)*
  159. Indian Health Service Director of HIV/AIDS Prevention and Treatment (S. 1790, Section 199B, p. 258)*

 

*Section 10221, page 2173 of H.R. 3590 deems that S. 1790 shall be deemed as passed with certain amendments.

Health Provisions in Labor-HHS Appropriations Measure

As you are probably aware, the House introduced an omnibus appropriations bill early this morning; the Labor-HHS division of the bill can be found here.  A few policy points worth highlighting:

  • The bill includes a ban on HHS funding of needle exchange programs; according to the House Appropriations Committee, this provision had been included in the bill prior to Fiscal Year 2010.
  • The bill also includes a blanket ban on HHS funds being used “in whole or in part, to advocate or promote gun control.”  According to the House Appropriations Committee, this ban had previously been confined solely to Centers for Disease Control funds.
  • The bill rescinds $400 million from the co-operative grant program included in Section 1322 of Obamacare.  As you may recall, $2.2 billion of the original $6 billion in funding was rescinded in the six-month continuing resolution (P.L. 112-10).  This additional rescission means $3.4 billion in co-operative funding would remain available.
  • The bill rescinds $10 million of the $15 million in mandatory funding for the Independent Payment Advisory Board provided in Section 3403 of Obamacare.
  • The bill rescinds approximately $6.4 billion in performance bonuses created in the 2009 SCHIP reauthorization (P.L. 111-3).
  • The bill requires the Secretary to establish “a publicly accessible website to provide information” regarding funds spent in the Prevention and Public Health Fund created by Section 4002 of Obamacare.  Grants over $25,000 would have to be publicly identified within 5 days of award, and recipients would have to provide semi-annual reports on their activities.  Some Members have previously expressed concern first that this fund would be used to fund questionable projects like jungle gyms and bike paths, and second that this fund suffers from accountability problems due to the mandatory, auto-pilot nature of the spending.  The President’s September deficit submission proposed reducing spending on the Fund by $3.5 billion over ten years.
  • The bill also  contains several prohibitions on grant funding from the Prevention and Public Health Fund from being used “for publicity or propaganda purposes,” or to fund the salaries of lobbyists.  This section also includes a prohibition on Prevention Fund monies being used to promote tax increases or “the advocacy or promotion of gun control.”

A full summary featuring several top-line spending numbers for the Labor-HHS bill can be found on the appropriations website here.  One particular note of caution if you’re trying to analyze the bill itself:  The last section of the bill includes an across-the-board rescission of 0.189 percent, so the actual spending levels under the bill would be lower than the bill’s plain text.

Health Provisions in House Payroll Tax Bill

As you know, the House introduced their payroll tax bill earlier today; text can be found here.  With regard to health care provisions, the bill provides for a two year Medicare physician payment update of 1 percent, costing just under $39 billion.  This spending is more than offset by spending reductions – including several included in the President’s deficit proposal, such as additional Medicare means-testing – meaning that the health care provisions collectively reduce the deficit by $32.9 billion.

A summary of the bill follows below; the full CBO score is online here.

 

Medicare Physician Payment:  Provides for a 1 percent update in reimbursement levels for 2012 and 2013.  Provides that these updates shall not be considered when calculating the Sustainable Growth Rate (SGR) reimbursement levels in 2014 and future years.  Costs $35 billion over five years and $38.9 billion over ten years.

Mandates three studies related to physician payments – an HHS study (due January 1, 2013) regarding bundled or episodic-based payments, a GAO report (due January 1, 2013) of private payer initiatives to promote quality and efficiency, and a MedPAC report (due March 1, 2013) on aligning payment incentives between Medicare and private payers.  Commits the committees of jurisdiction to spend the balance of the 112th Congress reviewing options, with an eye toward replacing the SGR mechanism.

Medicare “Extenders:”  Extends for one year increases in ground and rural ambulance reimbursement rates scheduled to expire at year’s end.  Requires an updated GAO report and MedPAC study on ambulance reimbursement levels.  Costs $100 million over five and ten years.

Extends for two years the Medicare therapy caps exception process scheduled to expire at year’s end.  Inserts a new requirement that claims processed under the exception process include an appropriate modifier indicating the claims are medically necessary as justified by medical records documentation.  Beginning in July 2012, subjects claims over $3,700 to a manual medical review process; the $3,700 threshold for review shall apply separately to physical therapy services (including speech-language pathology services) and occupational services.  Requires a report from MedPAC on the therapy benefit, data from HHS on the therapy payment system, and a study from GAO on the manual review process implementation.  Costs $700 million over five years, but saves $1.7 billion over ten.

Extends for one year the Medicare geographic floor for work scheduled to expire at year’s end.  Requires a MedPAC report by June 1, 2012 on work geographic adjustments.  Costs $500 million over five and ten years.

Extends for one year the Qualifying Individual program, which provides assistance to low-income seniors in paying Medicare premiums.  Costs $700 million over five and ten years.

Extends for one year Transitional Medical Assistance (TMA), which provides Medicaid benefits for low-income families transitioning from welfare to work.  Beginning in 2012, provides a process for terminating TMA benefits if a family’s income over a three-month period exceeds 185 percent of the federal poverty level ($41,347 for a family of four in 2011).  Costs $1.2 billion over five and ten years.

Physician-Owned Hospitals:  Modifies requirements on physician-owned hospitals included in last year’s health care law (PPACA, P.L. 111-148).  Permits hospitals under construction as of the date of enactment of PPACA to retain physician ownership; under current law, only those facilities that actually had a Medicare provider agreement in place as of the date of PPACA’s enactment may retain physician ownership.  Removes several restrictions currently in effect that limit the number of physician-owned facilities that may expand.  Costs $100 million over five years, and $300 million over ten; background information on CBO’s scoring practices with respect to physician-owned hospitals can be found here.

Health Insurance Subsidy Recapture:  Modifies the repayment levels for insurance subsidies provided under PPACA.  Under the health law, new health insurance subsidies are based on an individual’s (or family’s) most recent tax return – so that subsidy levels beginning in January 2014 will be based on reported income for 2012.  However, a family’s circumstances can change significantly during this time lag for a variety of reasons – a change in job, significant raise, divorce, birth, or death, to name just a few.

PPACA established a reconciliation process intended to recapture any subsidy over-payments – but the law capped the amount of such repayments at $250 for individuals and $400 for families for all families with incomes under 400 percent of the federal poverty level (FPL, $89,400 for a family of four); above 400% FPL, no limits applied.  Both the “doc fix” that passed in December 2010 (P.L. 111-309), and the 1099 repeal bill enacted earlier this year (P.L. 112-9), modified these levels; the House proposal would modify those levels still further.  The below spreadsheet shows the maximum repayment amounts (for individuals and families) under the original law, the current law (as modified), and the proposed changes:

Percentage of Poverty PPACA as Enacted December 2010 “Doc Fix”           (P.L. 111-309) Current Law (P.L. 112-9) House Proposal
Under 100% FPL $250/$400 $300/$600 $300/$600 $300/$600
100-150% FPL $250/$400 $300/$600 $300/$600 $400/$800
150-200% FPL $250/$400 $300/$600 $300/$600 $500/$1,000
200-250% FPL $250/$400 $500/$1,000 $750/$1,500 $750/$1,500
250-300% FPL $250/$400 $750/$1,500 $750/$1,500 $1,100/$2,200
300-350% FPL $250/$400 $1,000/$2,000 $1,250/$2,500 $1,250/$2,500
350-400% FPL $250/$400 $1,250/$2,500 $1,250/$2,500 $1,600/$3,200
400-450% FPL* Full subsidy $1,500/$3,000 Full subsidy Full subsidy
450-500% FPL* Full subsidy $1,750/$3,500 Full subsidy Full subsidy
Above 500% FPL* Full subsidy Full subsidy Full subsidy Full subsidy

(*While subsidies are only available to individuals and families with incomes below 400% FPL, the recapture penalties would apply to individuals who received subsidies, yet were not eligible for ANY subsidies based on their income.)

Saves $2.8 billion over five years, and $13.6 billion over ten (including both outlay and revenue effects).

Democrat claims notwithstanding, many may argue that the subsidy recapture provision does NOT represent a tax increase, on the grounds that individuals will be repaying a subsidy they received in error.  In addition, most of the subsidies provided under PPACA are refundable in nature, and some would argue that limiting refundable subsidies reduces government spending, rather than increasing taxes.  While some Democrats in the House have previously expressed concern about the higher repayment requirements, it is worth noting that last December’s increase in subsidy repayments passed the Senate by voice vote, and passed the House by the overwhelming margin of 409-2, with 243 House Democrats supporting what they later criticized as a “tax increase.”

Prevention “Slush Fund:”  Caps spending for the Prevention and Public Health Fund created in the health care law at $640 million annually, beginning in 2013.  Under current law, the Fund is granted $2 billion in mandatory appropriations for Fiscal Year 2015 and every year thereafter.  Some Members have previously expressed concern that this fund would be used to fund projects like jungle gyms and bike paths, questionable priorities for the use of federal taxpayer dollars in a time of trillion-dollar deficits.  Saves $2.5 billion over five years, and $8 billion over ten.

Hospital Outpatient Evaluation and Management:  Provides that, beginning in 2012, hospital facility fees for outpatient department evaluation and management services shall be paid at the facility practice rate associated with the physician fee schedule.  Saves $2.7 billion over five years, and $6.8 billion over ten.

Medicare Bad Debt:  Reduces bad debt payments to providers – for unpaid cost-sharing owed by beneficiaries – from 45 percent down to 25 percent over three years, beginning in 2013.  Applies changes to skilled nursing facilities and all other providers receiving payments for bad debt.  Differing versions of this proposal have previously been included in the President’s September deficit submission, and the Fiscal Commission’s final reportSaves $3 billion over five years, and $10.6 billion over ten.

Rebase Medicaid Disproportionate Share Hospital Payments:  In 2021, reallocates Medicaid DSH payments to hospitals treating low-income patients, based on states’ actual 2020 allotments (as amended and reduced by the health care law).  No budgetary impact in the first five years, but saves $4.1 billion over ten.

Additional Means Testing:  Increases means tested premiums under Parts B and D by 15%, beginning in 2017.  Freezes the income thresholds at which means testing applies until 25 percent of beneficiaries are subject to such premiums.  This proposal was previously included in the President’s September deficit submissionNo budgetary impact in the first five years, but saves $31 billion over ten.

Another Obamacare Myth Debunked

Last month, the Administration attempted to claim that this year’s lower-than-expected increase* in Part B premiums was due to Obamacare’s ability to lower costs through things like “investments” in prevention (read: jungle gyms).  Unfortunately for the Administration, however, the Kaiser Family Foundation – a left-of-center think-tank generally supportive of the law – released an analysis today undermining that assertion.  The analysis done for Kaiser found that quarterly physician office visits by those under age 65 started declining in 2008 (i.e., before Obama was even elected), dropped precipitously at the end of 2009 – before Obamacare was enacted – and has remained at low levels ever since.  As the liberal think-tank notes, this pattern is NOT consistent with Obamacare reducing health costs – it’s consistent with a bad economy stifling them:

As the economic downturn deepened, the number of physician visits among the privately insured started a downward trend, which has continued even as the recession technically ended in June of 2009….Even people who are insured are going to the doctor less.  Likely, consumers are reacting to the severe economic downturn and significant job-loss which has defined the economy over the last several years by cutting back on health spending.

The Kaiser study is also consistent with what the non-partisan Medicare actuary concluded was responsible for the slowdown in health cost growth: “Estimated spending growth in 2010 was slow due to continuing declines in employment and private health insurance coverage associated with the recent recession.”

In other words, spending growth was slower – and the Medicare premium hike lower – than projected NOT because Obamacare worked, but because the Obama “stimulus” didn’t.  Put another way: If the Administration wants to take credit for the lower-than-expected increase in Medicare premiums, does it also (finally) want to accept blame for the lousy economic conditions that were its primary cause?

 

* And just in case you forgot, candidate Obama promised to CUT premiums by an average of $2,500 per familyso ANY premium increase by definition means the law has failed to achieve its promised savings.

Lowering Health Spending — through a Bad Economy

At the HELP Committee hearing taking place now, head of the Medicare program Jonathan Blum again repeated the myth that this year’s lower-than-expected increase* in Part B premiums was due to Obamacare’s ability to lower costs through things like “investments” in prevention (read: jungle gyms).  That however is NOT what the non-partisan Medicare actuary concluded was responsible for the slowdown health cost growth; here’s the first paragraph of the actuary’s most recent summary of national health expenditure projections:

In 2010, NHE is projected to have reached $2.6 trillion and grown 3.9 percent, down from 4.0 percent in 2009.  Estimated spending growth in 2010 was slow due to continuing declines in employment and private health insurance coverage associated with the recent recession.

In other words, spending growth was slower – and the Medicare premium hike lower – than projected NOT because Obamacare worked, but because the Obama “stimulus” didn’t.  Put another way: If the Administration wants to take credit for the lower-than-expected increase in Medicare premiums, does it also (finally) want to accept blame for the lousy economic conditions that were its primary cause?