Tag Archives: Kaiser Health News

Changes to the Senate Health Care Bill

Thanks to Kaiser Health News, here is a fairly comprehensive rundown of major changes caused by reconciliation in a redo of  the Senate health care reform bill:

HEFTIER SUBSIDIES: Compared to the Senate legislation, the reconciliation bill would provide more generous subsidies to low- and moderate-income Americans to help them buy health coverage.

THE “MASERATI” TAX: The levy on high-cost insurance plans is scaled back and delayed, rendering it more a “Maserati” than a “Cadillac” tax. It would apply only to the portion of plans costing more than $10,200 a year for individuals, up from $8,500, and $27,500 for families, up from $23,000. The tax wouldn’t kick in until 2018, reducing the projected revenue to the government by 80 percent. Over time, however, the tax would hit more and more plans, because the tax’s threshold is set to increase at the rate of inflation while premiums are expected to continue to grow much more quickly than that.

CLOSING THE DOUGHNUT HOLE: Unlike the Senate bill, the reconciliation measure would eventually close the coverage gap, called the “doughnut hole,” for Medicare beneficiaries enrolled in Part D drug plans. (Currently, seniors who hit the gap must bear the full cost of their medications until they spend a certain amount, when coverage kicks back in.)

Under the new bill, seniors who hit the gap this year would get $250 to help cover the costs of their medications. Starting next year, they’d get a 50 percent discount on brand-name drugs, with the cost borne by the drug industry. In subsequent years, the discounts would expand and begin covering generic drugs, with the expense picked up by the government. By 2020, the discounts would reach 75 percent.

SHIFT IN MEDICARE ADVANTAGE PAYOUTS: Government payments to Medicare Advantage, the private-health plan alternative to traditional Medicare, would be cut back more steeply than under the Senate bill: $132 billion over 10 years, compared to $118 billion.

The government currently pays the private plans an average of 14 percent more than traditional Medicare. The new bill, besides reducing payments overall, would shift the funding; some high-cost areas would be paid 5 percent below traditional Medicare, while some lower-cost areas would be paid 15 percent more than traditional Medicare. The Senate’s plan that would have shielded some areas of the country such as South Florida from major cuts was largely eliminated.

A RAISE FOR DOCTORS: Primary care doctors would get a Medicaid payment boost in the reconciliation bill. Beginning in 2013 and 2014, the doctors’ payment rates would be on par with Medicare rates, which typically are about 20 percent higher than Medicaid. The goal is to ensure that there will be a sufficient number of doctors willing to care for the millions of additional people who would become eligible for Medicaid under the health care overhaul.

PUSHING UP THE MEDICARE TAX: The Senate bill adds a 0.9 percentage point to the Medicare payroll tax on earned income above $200,000 for individuals, or $250,000 for couples. Under the reconciliation bill, starting in 2013, people in those income brackets also would face a 3.8 percent tax on investment income, such as interest, capital gains and dividends.

PENALTY FOR NOT HAVING INSURANCE: Under the new bill, most Americans without insurance would face an annual penalty, starting in 2014 at $95 – the same as in the Senate bill. But in following years, the penalties in the reconciliation bill are slightly different. Those without insurance in 2016, for example, would pay the greater of two alternatives: a flat fee of $695, down from the Senate’s $750, or 2.5 percent of their income, up from 2 percent in the Senate bill.

EXPANDING MEDICAID: The reconciliation package differs from the Senate-passed bill in several ways. It would delete a provision dubbed the “Cornhusker kickback” that would have exempted Nebraska from paying any cost of a Medicaid expansion included in the bill. But it would provide full federal funding to all states for newly eligible Medicaid recipients for three years. And it would give additional funding to states like Vermont and Maine that have already moved to cover adults without children, which isn’t required under the Medicaid program.

MEDICARE SPENDING BOARD: The Senate bill would create an independent, 15-member board to recommend ways to control Medicare spending. The board remains in the reconciliation package, but would be expected to produce just about half of its original projected savings of $23 billion in the Senate bill. That’s because the new proposal would make greater cuts in Medicare Advantage plans

States Face Worsening Recession with Health Care Funds on the Chopping Block

For many people, the constant flow of news about the end of the recession and rebound of the economy, along with the President’s pledge to create new jobs through  drizzle-down tax cut economics, seems like a bad joke. Not only are jobs not coming back, but the states, which supply the basic safety net in hard times, are cutting back their budgets. Within those budgets low income people, who are searching for jobs while living day to day on unemployment and perhaps food stamps, also face growing health care problems.

In a recent report the Center for Budget and Policy Priorities, the Washington, DC-based think tank which tracks social programs, wrote:

The worst recession since the 1930s has caused the steepest decline in state tax receipts on record. As a result, even after making very deep cuts, states continue to face large budget gaps. New shortfalls have opened up in the budgets of at least 41 states for the current fiscal year (FY 2010, which began July 1 in most states). In addition, initial indications are that states will face shortfalls as big as or bigger than they faced this year in the upcoming 2011 fiscal year. States will continue to struggle to find the revenue needed to support critical public services for a number of years.

New gaps in 2010 budgets. An increasing number of states are struggling to keep their 2010 budgets in balance as the mid-point of the fiscal year approaches. Because revenues have fallen short of projections, mid-year shortfalls have opened up in 41 states — some of which have already addressed them — totaling $35 billion or 6 percent of these budgets.

These new shortfalls are in addition to the gaps states closed when adopting their fiscal year 2010 budgets earlier this year. Counting both initial and mid-year shortfalls, 48 states have addressed or still face such shortfalls in their budgets for fiscal year 2010, totaling $194 billion or 28 percent of state budgets — the largest gaps on record.

The crimp in  funds is forcing cutbacks in basic social services like health care in certain states. Kaiser Health News in conjunction with USA Today, has run down some of these states:

The recession is forcing states such as Washington to pare back health insurance programs for low-income people, even as growing joblessness boosts demand for help. Five of six states that use state funds to assist adults not covered by Medicaid are considering cuts, barring new enrollment or raising fees.

The more than 250,000 people in the state programs are adults who don’t qualify for the joint federal-state Medicaid program, either because they don’t have children or earn more than the tight limits states impose on Medicaid eligibility. They represent a tiny fraction of people who get government health insurance, yet the state programs are often their sole option for coverage.

States facing serious problems, according to thise article, include:

Washington: Basic Health — the first state-subsidized program of its kind when it began more than two decades ago — will fold by July unless lawmakers find $160 million in new revenue. About 300 people a day are added to its waiting list.

Tennessee: CoverTN , which subsidizes insurance for workers at certain small businesses and for adults earning less than $55,000 a year, halted new enrollment in December.

Connecticut: Charter Oak , which offers residents insurance for $93 to $296 a month on an income-based sliding scale, must freeze enrollment this year, Republican Gov. Jodi Rell says, unless lawmakers find more money.

Pennsylvania: The state’s adultBasic will double fees for doctor visits in March to $10-$20 and add a $1,000 maximum annual charge for hospital care. The wait list more than doubled in 2009, from 165,318 to 353,301.

Minnesota: The General Assistance Medical Care program, which covers adults earning less than $8,000 a year, will end in March unless lawmakers find an alternative.

The Democrats’ Lost Opportunity on Health Care

Writing in Kaiser Health News, Jonathan Cohn of the New Republic makes an important point about the process of health care reform. If Obama had not been so intent on winning bipartisan support, Cohn contends, the Democrats could have won the day without making the kinds of backroom concessions–including the so-called cornhusker deal in Nebraska–that have served to alienate even some supporters of reform. Here’s Cohn’s argument:

Remember how we got to this point–and how far President Barack Obama and the Democrats have gone to accommodate Republicans and the conservatives they represent. The plan Obama outlined on the campaign trail, the one Democratic congressional leaders endorsed, called for making sure nearly every American had insurance. But accomplishing that would have cost well over $1 trillion over 10 years and, by some estimates, closer to $2 trillion. That was more than conservatives could stomach. To get the price tag down below $1 trillion, they settled on a plan that covered far fewer people.

The original Obama and congressional plans all called for creating a public insurance option, into which people could enroll voluntarily. But that proposal, too, ran afoul of more conservative sensibilities–and was summarily dropped. (The House ended up including a public plan as part of its bill, but House leaders signaled long ago their readiness to drop it in order to reach a compromise with the Senate.)

These moves didn’t make health care reform more popular. If anything, they had the opposite effect. A plan that spent more money would have required finding more offsetting revenue or savings. But it also would have provided clearer, quicker benefits for middle-class people–many of whom now fear the bill does too little to improve their lives. As for the public plan, poll after poll has shown that it is popular. And the really crazy thing is that the Democrats might have been able to keep both features–with, at most, minimal compromises–if only they’d been willing to go it alone, the way the critics insist they did.

Under Senate procedures, the Democrats had the option of passing health care reform, or at least many of its elements, through what’s called the reconciliation process. In reconciliation, a simple majority of senators can pass a bill, without the threat of a filibuster. Rules limit what can and can’t be considered during the process, so it has definite drawbacks. But if Democratic congressional leaders were determined to pass something on their own–the way, say, Republican congressional leaders were frequently during the Bush years–they could have gotten much and maybe most of what they wanted.

But they didn’t–in no small part because they didn’t want to act in such a blatantly partisan way. Whether that was a matter of principle (i.e, they really believed bipartisanship is important) or a matter of perception (i.e., they thought voters would get mad), it ended up constraining them all year long. Instead of wrapping up negotiations and passing bills before the summer was over, the process dragged into the fall and winter. Over and over again, Democratic leaders (particularly Senate Finance Chairman Max Baucus) reached out to Republicans, only to be rebuffed. When that didn’t work, they were left trying to deal with the most conservative members of their own caucus–culminating in the negotiations with Nelson and the promise to cover his state’s Medicaid expansion. If Senate Democrats hadn’t needed Nelson’s vote to break the expected Republican filibuster–if they could have passed health reform with a “mere” 59-vote majority–they could have told Nelson to take a proverbial hike.