Posts Tagged Senate HELP Committee

Side-by-Side Analysis of Key Coverage Provisions of the Senate HELP Bill, H.R. 3200 and the Senate Finance Draft Proposal

pdf     Side-by-Side Analysis of Key Coverage Provisions

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The Trouble with Massachusetts

My mother lives on Martha’s Vineyard.

My wife and I always chuckle to hear her and others islanders refer to Massachusetts as “America”, as if the island has seceded from the Commonwealth and, incidentally, the United States. As I contrast the “reform” plans in Washington with the reality of the Massachusetts Connector from which key parts of the Senate HELP and House Tri-Committee plans are derived, I wonder if all of the residents of the Commonwealth are wondering what “America” is considering.

As outlined in The New York Times article entitled Massachusetts Takes a Step Back From Health Care for All, the Commonwealth has decided that they cannot provide the coverage that they promised. As a result, 30,000 legal immigrants are set to lose their coverage. Coincidentally, The New York Times reports that the Congressional Budget Office estimates House Tri-Committee bill released yesterday will leave only 17,000,000 people uninsured in 2019, of which nearly half would be illegal immigrants. Similarly, both legislators in the House and in Massachusetts believe that a surcharge on the wealthy, aka a tax increase, is the only way to make the math work.

It was not so long ago, even in 2008, when the federal government was in the habit of actually following the laws passed by Congress, such as the United States Bankruptcy Code. In that bygone era, some might have wondered whether the Constitution or the Declaration of Independence might weigh against the “reform” plans fashioned in the House in which a very small minority was hectored into financing benefits for the majority. Others might have pondered whether a National Institute for Health and Clinical Excellence-like program might constitute an unwarranted invasion of privacy, which many hold dear when applied to Roe v. Wade. In today’s world, however, federal judges will not uphold the United States Code in the GM bankruptcy, so I am skeptical that they will do so in healthcare reform.

What to do in response? As any good lawyer knows, when the law favors your side, argue the law; when the facts favor your side, argue the facts. The facts are that this great country was established by immigrants. It is my view that the enduring legacy of America has resulted from and depends upon the diversity and vibrancy that immigrants bring, whether physicians or scientists or engineers or farmers or laborers or artists. To think that the immigrant, and especially the legal immigrant, will bear the brunt of failed healthcare reform is appalling. To think that the Democratic Party will deliver the blow is, I suppose, their version of Nixon going to China.

True healthcare reform will not disadvantage the wealthy, and it will not break the back of the immigrant, who not so long ago were you and me. Shame on all of us if we allow that to happen.

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Senate HELP Committee Passes Affordable Health Choices Act

pdf     Senate HELP Committee Passes Affordable Health Choices Act

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Healthcare Reform: The New York Times vs. The New York Times

On occasion, I wonder if the editorial page of The New York Times believes that its audience is comprised of the demographic that the rest of the paper touts to advertisers. With respect to healthcare issues, the Op/Ed page is in stark contrast to its healthcare team of Reed Abelson, Sheryl Gay Stolberg, Robert Pear and Jackie Calmes.

Compare the following:

  • HELP Is on the Way, an opinion piece published today by Paul Krugman, the economist and Nobel Laureate. The crux of his assertion is that the Senate HELP Committee was unfairly derided in mid-June when it released it first draft proposal; all the Senate HELP Committee had to do was finish drafting the bill, and, magically, the cost of the bill was reduced to $597B. I quote:  “The budget office says that all this would cost $597 billion over the next decade. But that doesn’t include the cost of insuring the poor and near-poor, whom HELP suggests covering via an expansion of Medicaid (which is outside the committee’s jurisdiction). Add in the cost of this expansion, and we’re probably looking at between $1 trillion and $1.3 trillion.” Oh, right, $600B for health reform that does not cover the cost of insuring the poor and the near-poor, which I thought was the point for people like Krugman. Not to worry, “much of the expense can be offset with straightforward cost-saving measures, like ending Medicare overpayments to private health insurers and reining in spending on medical procedures with no demonstrated health benefits”. I am curious whether the “serious health economists” he references think his prescription is just a little too easy; I am sure what serious healthcare executives think.
  • In contrast, the recurring feature “The Work-Up” reflects a more serious view of the issues before the country. For example, read Jackie Colmes’ article Revisions to Health Bill Are Unveiled by Democrats, which more clearly and accurately describes the Congressional Budget Office’s Analysis of the HELP Bill, or her article Obama and Congress Clash on How to Pay for Health Care. Another example is Reed Abelson’s article Insured, but Bankrupted by Health Crises, which we have posted about before.

I am well aware of the historic difference between reporting and editorials, and I hope that the difference between the two is easily distinguishable in this blog. Even so, healthcare reform is too important for Nobel Prize winning economists to use those credentials to make glib policy arguments. Americans, and particularly the uninsured, deserve better.

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Healthcare Reform or BBRA 97 Redux?

As reported earlier today by Roll Call and as set forth in the CBO’s Estimate of the Cost of  Senate HELP Bill, the Congressional Budget Office has scored the cost of the Senate HELP Committee’s mark-up of the proposed Affordable Health Choices Act at $611B, a significant decrease from the $1T estimate on June 15.  

Based on the CBO’s letter, the “savings” result primarily from (a) reducing the threshold for subsidies for families and individuals under health insurance exchanges from 500% to 400% of the federal poverty level, and (b) reducing the amount of the subsidies for those who qualify.

What has not changed from the June 15 CBO estimate to today’s estimate is that a substantial number of Americans would remain uninsured. The most favorable year under the revised bill is 2016, when “only” 32M people would remain uninsured.

Most providers that I know continue to take a wait-and-see approach on this front. I believe that the continuing skepticism over the implementation of a public plan is likely to reinforce this stance. In turn, I continue to believe that the provider community remains at substantial risk, but not where they think.

There is just not a way to implement a true “public option” and remain budget neutral without taxing employer-sponsored healthcare, and even Senator Baucus has clearly indicated that he will not cross the unions on that issue. Assuming that the Senate Republicans and 2-3 moderate Democrats hold fast against a “public option” and that the CBO continues to provide unbiased analysis, it seems likely that the “public option” will fail, especially if the most robust bill leaves more than 30M people uninsured.

As such, it is very possible that comprehensive healthcare reform will fail but payment reforms will become law. Said another way, it appears to me that the providers may make real and permanent sacrifices, while other stakeholders will be minimally harmed.

Perhaps I am overly cynical, but I think it is a little too convenient that the CBO has scored the cost of the Senate HELP bill at precisely the amount of reimbursement cuts that President Obama has proposed for providers. For those who lived through BBRA 97, it will hurt twice as bad.

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Winners and Losers in the House Tri-Committee Draft Bill

The 850-page House Tri-Committee Draft Bill is the product of the House Committees on Ways and Means, Energy and Commerce, and Education and Labor. The Tri-Committee approach is a luxury afforded by the Democratic power in the House, and Chairmen Rangel, Waxman, and Miller did not squander the opportunity to deliver a comprehensive healthcare reform bill.

Several portions of the bill are significant enough to deserve individual focus, but I will start with my view of the winners and losers in the draft.

Winners:

  • Primary care providers, broadly defined, especially rural providers (whose constituency is more important to the House than the Senate), through new programs and improved reimbursement
  • Accountable care organizations
  • Medicare beneficiaries, through expansion of covered services and waivers of co-payments, co-insurance and deductibles
  • Mental health providers, through payment for marriage and family therapy and the elimination of the 190-day lifetime limit on psychiatric hospital stays
  • Starbucks, where a $4 cup of coffee just skirts the proposed $5 limit on monetary relationships between physicians and vendors
  • Attorneys for nursing homes and skilled nursing facilities

Losers:

  • Private insurers, both through the introduction of both Health Insurance Exchanges and a “public option” plan
  • Hospitals dependent on small employers, who will find the “public option” irresistible
  • For-profit owners (especially private equity firms) of nursing homes and skilled nursing facilities
  • Any vendor of drugs, devices, biologics or supplies accustomed to using an expense account to transact business with a physician
  • Physician-owned hospitals

Overall, the House has delivered a more polished draft than the Senate HELP Committee, whose bill is thematically closer to the House version than the Senate Finance Committee. However, I think it is unlikely that the CBO can score the House Tri-Committee draft at less than $1.2T. Unless the House changes course and realizes that taxing the employer health benefit is the only way to pay for a plan that exceeds $900B, some reduction in these initiatives will be necessary.

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Current Thoughts of the American Consumer

Ceci Connolly writes about a new Washington Post-ABC News poll in an article entitled “Most Americans Want Health Reform But Fear Its Side Effects”. The most striking quote is the following: “Most respondents are “very concerned” that health-care reform would lead to higher costs, lower quality, fewer choices, a bigger deficit, diminished insurance coverage and more government bureaucracy.”

This is almost exactly what is happening in Massachusetts currently, which is in large part the blueprint for the “Kennedy Bill” being marked up the Senate HELP Committee. Anecdotal evidence suggests that the result of the Massachusetts Connector plan is higher costs, lower quality, and decreased access, and I anticipate that scholarly articles will soon verify this. For more on the cost piece, see Kay Lazar’s article entitled “State cuts its health coverage by $115M” in The Boston Globe.

This outcome is not surprising to anyone who studied the lessons from TennCare – when you add a large group of people to a health plan whose disease status kept them from getting insurance and then offer an already scarce number of providers below market rates to provide services, what do you expect?

Perhaps Washington underestimates the American consumer. Maybe the American consumer is aware that Medicaid benefits are always under pressure when states have a budget crisis. Maybe the American consumer thinks about how long and difficult a process it is to obtain a driver’s license or collect unemployment benefits or complete an income tax return. Maybe the American consumer wryly smiles at the old joke, “I’m from the government, and I’m here to help.”

As I stated on a televised healthcare reform panel last night, it will take a miracle for Congress to re-engineer 20% of the American economy in 4 months and do a good job. Nothing in the history of the United States suggests otherwise.

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