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Health On The Hill Transcript: President Obama’s Health Budget Scrutinized

Jackie Judd of the Kaiser Family Foundation is joined by Mary Agnes Carey of Kaiser Health News and David Nather of Politico Pro to talk about the president’s 2012 proposed budget and a House bill that would repeal a provision of the health care overhaul that small businesses find particularly onerous.

President Obama’s fiscal 2012 budget request would, among other provisions, stop a scheduled Medicare physician payment cut for two years. Meanwhile, the House Ways and Means Committee is scheduled to consider legislation that would repeal a paperwork provision in the health law that has drawn heavy opposition from small business.

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JACKIE JUDD: Good day. This is Health on the Hill. I am Jackie Judd. This week, it is all about the money. So, we will be reviewing President Obama’s budget proposal for 2012 and what it means for health care. At a news conference today, Mr. Obama said that while Medicare and Medicaid are left untouched in his budget, he hasn’t given up on trying to rein in spending.

PRESIDENT BARACK OBAMA: Medicare and Medicaid are huge problems because health care costs are rising even as the population’s getting older. And so what I’ve said is, that I’m prepared to work with Democrats and Republicans to start dealing with that in a serious way. We’ve made a down payment on that with health care reform last year. That’s part of what health care reform was about.

JACKIE JUDD: And we will also get an update from our roundtable on the status of Republican efforts to strip funding from the health care reform law. Joining me today, as always, Mary Agnes Carey, senior correspondent for Kaiser Health News, and David Nather of Politico Pro. Welcome to you both.

David, I want to start with you. What was the kind of overarching political statement that the president was making in his budget about his commitment to health care and the reform law?

DAVID NATHER : Well, he was making it clear that he is not backing down an inch from his support for the law. You know, he came out in the State of the Union Address and told Republicans I am willing to work with you to make this better. We can work on medical malpractice reform. We can work on tweaking the law around the edges, but I am not going to back off my support for the law and the budget statement makes that very, very clear.

Throughout the budget document, it says the health care reform law is deficit reduction, because the Congressional Budget Office has said that overall it brings spending down, because it increases spending in some areas but then it decreases in others, so overall it is deficit reduction. They are still trying to package it that way. That is a clear line of division between the president and the Republicans, who think that the law is going to spend more than is estimated and in the end it is not going to be deficit reduction at all.

JACKIE JUDD: Let’s talk for a moment about what the president wants to spend in the Department of Health and Human Services, which of course administers big health care programs. As we speak, there is a disagreement between HHS and the Office of Management and Budget about whether they got a bump in their budget, a bump down from the last inactive budget, what is your take?

DAVID NATHER: Yeah, it is very funny and it is very complicated. It’s clear that the funding level they would get for 2012 is below what the president proposed in 2011, but that budget was never enacted; in fact we are still working through the government’s funding for 2011 right now. But if you compare it to 2010, the Office of Management and Budget said it is a slight increase over 2010.

The way HHS counts the numbers, it is a slight decrease, because they count it differently, so I guess it depends on which one you want to pay attention to, but if you look at the official OMB documents, it is a very, very slight increase.

JACKIE JUDD: Okay and some of the dollars are moved around, so Mary Agnes, what programs at HHS get a little bump up?

MARY AGNES CAREY: Well, for example spending on biomedical research, health care work force, community health centers, how to train primary care physicians, NIH gets a little bit of a bump. Those things see an increase. The budget would stop for two more years any scheduled cuts in Medicare physician payments. The President wanted to make a strong statement with that. So, there are some areas that get some increases and some get some decreases.

JACKIE JUDD: And what you just mentioned, we call inside the beltway, the “doc fix,” who are the winners and losers in his proposal? Who objects? Who supports it?

MARY AGNES CAREY: Well, physicians, of course, like the idea very, very much.

JACKIE JUDD: The American Medical Association.

MARY AGNES CAREY: The American Medical Association, other speciality groups have long found a lot of problems with how Medicare pays physicians and they want that fixed, but of course if you are going to fix physician payments, you have got to go after it another way, to pay for it rather — there will be efforts to trim waste, fraud and abuse. Some people who are on the receiving end of that may feel that it is overreaching.

JACKIE JUDD: This is to make it deficit neutral?

MARY AGNES CAREY: Exactly, to pay for the financing for the doc fix. There also would be a change in how states can tax providers, which impacts their Medicaid reimbursements, so Medicaid directors may not like those changes, but it is very typical in Washington, some get some things and some things are taken away from others.

JACKIE JUDD: Okay, let’s move on to the Republicans’ efforts to defund the Health Care Reform Law, as I read it, David, it is a tangled legislative process at the moment, can you untangle it for us?

DAVID NATHER : Well, I can sure try. The Temporary Spending Bill is on the House floor this week to fund the government for the rest of the year, and there were a number of Republicans who wanted to use that as a vehicle to withhold funding for the entire law. Steve King of Iowa is one of those. He wanted to offer an amendment to defund the entire law.

It looks like he did not get the rules protection to do that from the House Rules Committee, so he may still offer that amendment, but when he does it will probably be ruled out of order because it tries to touch too many things in an Appropriations Bill.

To really get at all of the different sources of funding, it sounds like there are some that appropriators can touch and some that they can’t, because some of the funding is automatic and mandatory, so it would have to be other committees that would have to actually write legislation to stop that from happening.

Now, what is going to happen is there are a number of amendments to just defund parts of the law, like there are three different Republicans who want to defund the individual mandate, which is the new requirement that everybody has to have health insurance. Not clear yet which one is going to get to offer theirs, because there are like three different versions of the same thing. But it looks like there will be a few of those targeted sort of efforts, also one very possibly to defund the Center for Consumer Information and Insurance Oversight.

JACKIE JUDD: To get a sense that Republicans are frustrated, are they surprised by how difficult this process has become, even before they get to a floor vote?

DAVID NATHER : Yeah, I think they are very frustrated. I talked last week to Denny Rehberg of Montana, who was another one of the Republicans who wanted to defund the whole thing, and he said, you know, I am really having trouble writing this in a way that would capture everything. I am having trouble getting permission from the appropriators. They are telling me that if you want to defund certain things, you can’t do that.

It has to go through the committees that actually write legislation, so in the end it looks like he is not going to offer that at all, and Steve King is running into the same trouble, and it is going to be very hard to explain to the Republican base and to some of the Tea Party supporters who really want the entire law stopped, why they can’t just do that on the first round.

JACKIE JUDD: Okay, and a final quick question to you, Mary Agnes, bring us up to date on the status of the 1099 repeal, that is the provision in the reform law that requires even small businesses to file with the IRS any transaction with a vendor of $600 or more.

MARY AGNES CAREY: That’s right, the House Ways and Means Committee is going to have a markup this week on that legislation. They expect it to continue the committee work to be done by the beginning of March in the House, and I expect it to go to the floor. As we know, the Senate has already passed a 1099 repeal, lots of people dislike this provision, Republicans, Democrats, the president, small business, so I think you could see quick action on that.

JACKIE JUDD: Okay, thank you both so much. As I said, it was about the money today.


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