Health On The Hill Transcript – Spending Cuts Agreed To As Entitlement Reform Looms

KHN’s Mary Agnes Carey talks with Jackie Judd about developments on the Hill. This week: The fiscal 2011 spending deal reached late last week would remove some minor provisions of the health care law and require that the Senate vote on two measures the House already has approved – denying federal funding for both the health care law and Planned Parenthood. Later this week, President Obama is expected to lay out his plans for reducing federal spending on Medicare and Medicaid as part of his deficit reduction plan. 

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JACKIE JUDD: Good day, I’m Jackie Judd and this is Health on the Hill.

The 2011 budget deal reached in dramatic fashion last Friday night is still being fine-tuned three days later and on Wednesday, President Obama is planning to roll out some ideas about how to reduce the federal deficit. What does all of this mean for health care spending and policy? Here to help us answer that: Mary Agnes Carey, as always, senior correspondent for Kaiser Health News. Welcome.

Embedded in this deal Friday night was a little bit of tinkering to the [health] law. Walk us through it.

MARY AGNES CAREY: Exactly. There’s two provisions. One would have allowed some low-income workers, depending on the cost of their health insurance, to take the money that their employer was providing for health insurance and to go outside and purchase health insurance in the exchanges, which start in 2014. This menu of health insurance. This is championed by Ron Wyden, a Democratic senator from Oregon. He called it the “Free Choice” provision, and he’s very upset of course that this has been taken out, but some employers were concerned that this might have had some younger employees who are healthier get out of the risk pool, get out of the employer-sponsored insurance. That’s one provision.

The second would take away a provision that would have allowed the creation of nonprofit cooperatives, entities that would have competed with private insurers for business. This was something that emerged very early in the health overhaul debate from Kent Conrad, Democrat of North Dakota, senator, as an option, rather, an alternative, to that there was no public option in the bill. But those co-ops are now out. (editors’ correction: While this is still in the recorded video, it is not accurate. As part of a deal to fund the government for the remainder of fiscal year, funding for private nonprofit health insurance cooperatives created in the health law was reduced by $2.2 billion, but not removed. We regret the error.)

JACKIE JUDD: Going back to the first point, the Wyden proposal, if that was to be enacted in 2014, how do you save money now?

MARY AGNES CAREY: It may not necessarily be money, it may be more of a policy issue. Large employers, large employer groups were upset about this. So this could have very well simply been a concession that Democrats were willing to make. It also was viewed as a provision that could have been a little difficult to implement, so I think, perhaps, as part of the negotiations, Democrats decided that this is something – a place – where they can go and make a concession, they agreed to do it.

JACKIE JUDD: As I mentioned, the budget deal is still being written as we speak. What happens from here on out? What is the timeline?

MARY AGNES CAREY: Well, they’re expected to finish it even as today to give members enough time to read it over. And the House and Senate are expected to pass it later this week to review it. But as we know in Washington, the devil’s always in the details. They carved the big picture deal, which is what was reached late Friday night, then they have to go through and implement, in legislative language, the provisions and there’s always room for possible change, but the expectation is that it will pass later this week in both chambers.

JACKIE JUDD: As part of the deal, the Senate is supposed to take freestanding votes on two issues. One being defunding Planned Parenthood, not to defund it, and the other is to defund the repeal law itself. Neither one of these will pass the Senate. Is this about getting lawmakers on the record in anticipation of the 2012 election?

MARY AGNES CAREY: Absolutely, House Republicans know they cannot repeal the health care law, they cannot defund the health care law, but they’re doing everything they can to get lawmakers on record. So, as you say, as we head into those 2012 elections, they can say to voters, in the House of Representatives, where Republicans rule the chamber, we delivered on our promises. If we simply get more Republicans in the Senate, and have a Republican take the White House, we can make good on these promises. So, it’s all about getting people on the record.

JACKIE JUDD: And a final question: another look ahead, this having to do with the White House. The President is expected to give a speech Wednesday about deficit reduction. There were some hints over the weekend that he is willing to look at Medicare and Medicaid. What do you know do far?

MARY AGNES CAREY: The thought is that he’ll talk in broad terms – perhaps setting spending targets, maybe not a lot of specifics. But this is symbolic to have the Democrats and President Obama to come out and say that he is willing, and the party is willing, to look at changes to Medicare and to Medicaid to reduce the deficit. We know Paul Ryan put his plan out last week, a House Republican, that would have major changes to the entitlement nature of Medicare and Medicaid. I don’t think the President or Democrats would go that route, but for them to engage on those two issues is, I think, extremely significant.

JACKIE JUDD: And we will hear more about it later this week. Thank you, Mary Agnes Carey.