Bowing to pressure from Democratic fiscal conservatives, House Democratic leaders scaled back health-related provisions in tax extenders legislation the House passed before beginning its Memorial Day recess. In the package, physicians who treat Medicare patients would see a 2.2 percent increase for the remainder of this year and a 1 percent payment increase in 2011. Extensions of COBRA subsidies and additional Medicaid funding for states were removed from the bill. The Senate could act on the package as early as June 7 when it returns from the Memorial Day break.
JACKIE JUDD: Good day. I am Jackie Judd with Health on the Hill. Congress has begun its Memorial Day recess, leaving behind some unfinished business related to health care legislation. To fill us in, Mary Agnes Carey, senior correspondent for Kaiser Health News, and Julie Rovner of National Public Radio. Welcome to you both, as always.
Julie, let’s start with you. The House did vote on what has come to be known as the “doc fix.” Tell us what it was.
JULIE ROVNER: This is the third time now, this year, that Congress has left for recess without actually fixing this 21-percent cut in doctor payments under Medicare, meaning that it does technically go into effect today.
Now, the Department of Health and Human Services Medicare officials say that they will start holding bills in hopes that Congress will fix this before the middle of the month when actually they will have to start paying these and that is what happened the last two times. Of course, the House passed this bill on Friday; the Senate had already left, so it needed to be passed by the Senate also.
And in fact, we have been warned by Senate Majority Leader Harry Reid that even though the House has passed this bill, the Senate is not likely to pass it in the form in which the House passed it. The Senate may have a lot of other things to do to it, it was not simply the doc fix that they did. This was part of a Tax Extenders bill, it had taxes and other spending, unemployment insurance extension in it, too, so this is a much bigger bill.
JACKIE JUDD: Now even though HHS says it is going to hold these claims for a period of time, are the medical associations up in arms?
JULIE ROVNER: They are furious. I mean, the fact that this is now going three times this year, this is a problem that dates back to 1997. It is what everybody agrees is a flawed formula. Congress has routinely put off these cuts since 2003. There is widespread agreement that we can’t be cutting Medicare payment to doctors and certainly not to 21-percent. Once they let this go into effect, it was a 5-percent cut, but ever since then they have been saying no, we have got to figure out how to fix it. No one has been able to figure out how to fix it.
At one point last week in this bill, it was going to be a five year, they were going to put this basically off for five years, which presumably would give them time to figure out how to fix it. Now, because there was no agreement on how to pay for it. It has been shortened to only 19 months, so it is basically a 2-percent –
JACKIE JUDD: So we will be hearing about it again.
JULIE ROVNER: Oh yeah.
JACKIE JUDD: Very soon.
JULIE ROVNER: You will be hearing about it again. This is not over yet.
JACKIE JUDD: Okay, Mary Agnes, two other issues the House also grappled with last week, one is Medicaid; the other is COBRA. Let’s start with COBRA, which of course is the health insurance that is supposed to see people through a period of unemployment. What happened there?
MARY AGNES CAREY: Well, there was a discussion about extending this extra benefits through the end of the year, again very politically popular for a lot of folks because a lot of people are out of work, COBRA insurance is quite expensive, but ultimately it was taken out of the bill because we talked a little bit about this last week, fiscal conservatives, the Democrats, the Blue Dogs in the House were very concerned about the size of the bill, so why they want to come back later and perhaps look at this again and pass it, it was taken from the package.
JACKIE JUDD: As was infusion of funds from the federal government to the states for Medicaid.
MARY AGNES CAREY: Now a lot of state governors had planned on this money. It has been a lot of state legislatures that already counted on it in their budget. It was going to extend this additional F-Map, Medicaid money, through next June, but again that was pulled back due to cost concerns. House Speaker Nancy Pelosi says she wants to return to both these measures and pass them.
JACKIE JUDD: Why does she think she can come back and all of the opposition from the Blue Dogs will be gone?
MARY AGNES CAREY: Well, it probably won’t be gone. It will still be there, but I think that there will be a lot of pressure, especially from governors, Democratic and Republican governors, for example, that want the Medicaid money back.
Same thing for the COBRA extension to help people find coverage. She has talked about how all these bills, including the Health Care bill that passed, have been a really heavy lift in the House. It is not going to get any easier, that is for sure.
JACKIE JUDD: Julie, what Mary Agnes was talking about was more the short-term funding for Medicaid. There was an interesting study released last week by the Kaiser Family Foundation regarding the long-term funding of Medicaid.
JULIE ROVNER: There was. It was interesting. There are 20 lawsuits now from the states arguing about the constitutionality of the health law. One of the arguments in that lawsuit is that there would be basically this unfunded mandate regarding Medicaid because so many new people would be put on Medicaid.
Well, the study last week from the Kaiser Foundation and the Urban Institute found that more than 95-percent on average of that cost would be paid by the federal government, that the states are saying oh my goodness, we are going to have to pay so much money for Medicaid and yet the vast, vast majority of that funding is going to be coming from the federal government, and unlike this money, this short-term money which is just the federal government putting in an infusion, this money in the law will be coming from the federal government so this isn’t something that Congress will have to do later. This is money that the federal government has promised up front to the states.
JACKIE JUDD: As I mentioned at the top, Congress has gone home for the week. They will be back next week. What kind of messaging do both Republicans and Democrats bring to their home districts to either try to undermine parts of the Health Care Reform law, or prop it up?
MARY AGNES CAREY: Well, Democrats for sure are out there talking about this package of early deliverables, provisions in the bill such as you can keep an adult child on your health insurance policy up to age 26, to help companies who want to provide early retiree health coverage to give them some money towards that, or to have people in this high risk pool if you have been uninsured for six months and need help. That will definitely be the message.
As we know, a lot of the other provisions, the Medicaid expansion Julie is talking about, the health insurance exchanges don’t kick in until 2014, so I think the focus will be on what consumers could see right now in the bill that could help them.
JACKIE JUDD: And Republicans?
JULIE ROVNER: You know, there has been a lot of concern by supporters of the bill that the opponents of the bill have really taken over the marketplace of ideas, if you will, that supporters aren’t doing a lot of talking about this but that opponents are doing a lot of talking about this. Certainly the polls have not budged. There hasn’t been the bounce the Democrats had hoped to see in terms of people having more approval of the bill.
What we have seen certainly is that Democrats tend to like it and Republicans tend not to like it. That was kind of predictable, but generally, overall, you see kind of it is pretty evenly split but certainly there has not been any budge in terms of more people approving of it.
One thing we saw last week –
JACKIE JUDD: But they continue to like the piece parts of it.
JULIE ROVNER: Yes they do continue to like the piece parts of it, but there really has not been this big, you know, now that it is starting to come into effect. There has not been this real bounce in terms of overall approval rating, and I think some people are saying that is because Republicans have really been out in force saying we really don’t like this and they have got lots of new, there was a new bill last week introduced by the Republicans.
They are not talking about repeals so much anymore as saying this is what we would do instead, so there has been a lot of, every time the Democrats come up with something, the Republicans come out against it, that there has been a lot of activity on the opposition side saying this is what we don’t like about it. I think we also saw this last week, the Democrats, or not so much the Democrats, the Obama Administration sent out to Medicare beneficiaries who have been very confused about a lot of this, how this would affect them.
JACKIE JUDD: The brochure.
JULIE ROVNER: The brochure. Mary Agnes, I think, has the brochure, a four page brochure, what this would mean to seniors, and Republicans were all over this immediately saying that it was inaccurate, that it was propaganda, and what is funny is that this really hearkens back to a similar brochure the Bush Administration sent out in 2004 about the new drug law that was passed mostly with Republican support.
JACKIE JUDD: So not to be dismissive of this from either side, but isn’t this more about political tit for tat than real meaningful substance, or is it both?
JULIE ROVNER: It depends where one is coming from. It does bear a striking resemblance to the brochure that was put out in 2004 and depending on where you are coming from, you can make the argument that there is a lot of misleading information and that seniors deserve to have accurate information. One could say if you really want to pick nits that there are things that are a bit of a stretch.
Back in 2004 the Republicans were in fact found guilty by the GAO of political propaganda, not so much for the flyer that was put out, but they were doing other things. They put out some video news releases that didn’t actually say they were from the –
JACKIE JUDD: Is it possible this brochure will go the same route?
JULIE ROVNER: I don’t think this brochure will be found guilty of political propaganda. As the previous flyer was not, in fact the previous flyer was found guilty of perhaps –
JACKIE JUDD: That is what I meant.
JULIE ROVNER: Yes. I think there be a lot of continued fight over it, but I think that it is in the eye of the beholder.
JACKIE JUDD: One final question before we close for the day, and that has to do with what Kathleen Sebelius said last week about that part of the new health care reform law, allowing up to 26 years olds to stay on their parents health insurance policies.
MARY AGNES CAREY: Right, exactly. She is asking employers to put these children on earlier than they have to while the provision kicks in, in September, I think September 23rd, six months after the President signed the bill into law, employers don’t have to embrace this and put these kids on the policies until the beginning of the new plan year, which for a lot of employers is January 1st. It could be even later.
It is the beginning of the new plan year after, I believe it is September 23rd, is that right Julie? So you have a lot of employers out there looking at this saying I really don’t want to do the administrative costs, don’t want to bother with the hassle, I don’t have to do this, and so you have consumers going to their employers who are saying now wait a minute, I thought my son or daughter could be on my policy starting in September. The law allows that to not necessarily be the case.
JACKIE JUDD: And you have the administration anxious to get it done because it would be an early popular deliverable.
MARY AGNES CAREY: Exactly. It is a real crowd pleaser, it seems to be, people really like this provision, and so they want employers to move forward. Secretary Sebelius said they are reaching out to all sorts of employers to get them to move faster on this provision, but the law doesn’t require them to do so.
JACKIE JUDD: And the reason she did this is because of the survey that you were talking about before we started taping.
JULIE ROVNER: That is right. What happened is they got a lot of insurers to agree to do this early. The problem is two-thirds of the people who have insurance on the job are in what are called self-insured plans. So it is not the insurer who is making the decision about the benefits, it is the employer. And a recent survey done by the benefit consulting firm Mercer found that of these self insured, these large employers who are deciding the benefits, only about a quarter of them said they are going to start early.
So, even though you have got insurers, people who are in insurance plans where the benefits are decided by the insurer, most of the people are in plans where the benefit is decided by the employer, and the employers are not starting early, even though the insurers are, so it is a little bit confusing. If you are in a plan where the insurance company is making the decision, you may be lucky and you are going to get it early, but if you are in a plan, and two-thirds of the people are, where the employer is making the benefits decision, you are less likely to get it early.
JACKIE JUDD: Good. We understand now. Thank you very much. Thank you both, Julie Rovner, Mary Agnes Carey. Thank you for joining us. I’m Jackie Judd and this has been Health on the Hill.