Du­el­ing bud­get plans

Dems, GOP ver­sions clash, but both tar­get deficit

Modern Healthcare - - THE WEEK IN HEALTHCARE - Rich Daly and Jes­sica Zig­mond

Demo­cratic and Re­pub­li­can law­mak­ers laid out con­flict­ing long-term mark­ers for health­care spend­ing on Capi­tol Hill last week as pol­i­cy­mak­ers con­tinue to bat­tle over the fed­eral deficit and gov­ern­ment spend­ing.

Sen. Kent Con­rad (D-N.D.), chair­man of the Se­nate Bud­get Com­mit­tee, of­fered a draft bud­get that was largely based on the deficitre­duc­tion com­mis­sion ap­pointed by Pres­i­dent Barack Obama. The mea­sure was sig­nif­i­cant as the first Se­nate Demo­cratic bud­get in four years and in its use of bil­lions of dol­lars worth of health­care pol­icy changes to re­duce fed­eral spend­ing, in­crease tax rev­enue and re­duce the fed­eral deficit by $5.4 tril­lion over the next 10 years.

Con­rad touted the bud­get pri­mar­ily as a way to re­duce fed­eral deficits over the com­ing 10 years and used a se­ries of health­care cuts to achieve that, in­clud­ing an ac­cel­er­a­tion of the hospi­tal rate-cut­ting au­thor­ity of the con­tro­ver­sial In­de­pen­dent Pay­ment Ad­vi­sory Board and cut­ting Medi­care pay­ments for hospi­tal bad debt and med­i­cal ed­u­ca­tion.

How­ever, the bud­get also in­cluded fed­eral health pol­icy changes sought by provider groups, in­clud­ing elim­i­na­tion of a 2% cut in Medi­care provider pay­ments planned for the start of 2013 as part of the deficit-re­duc­tion deal struck last sum­mer. Also, Con­rad’s bud­get would scrap the Medi­care physi­cian pay­ment for­mula, which is slated to im­ple­ment a 32% cut in Jan­uary un­less over­rid­den by Congress.

Repub­li­cans blasted Con­rad for fail­ing to in­tro­duce an orig­i­nal bud­get in­stead of re­cy­cling a pro­posal that drew lit­tle sup­port from ei­ther the ad­min­is­tra­tion or Congress. The deficit com­mis­sion pro­posal gar­nered

only 38 votes in a March roll call by the House of Rep­re­sen­ta­tives.

Con­rad, who em­pha­sized that his bud­get was a start­ing point, con­ceded it was un­likely to face any votes un­til af­ter the Novem­ber elec­tion.

Se­nate Repub­li­cans, who have long ar­gued that Democrats are avoid­ing bud­get votes be­cause their swing-state mem­bers do not want to be on record sup­port­ing spend­ing in­creases, in­tro­duced their own bud­get last week. That mea­sure echoed many of the pro­vi­sions of the House-passed bud­get, in­clud­ing its con­tro­ver­sial plan to move Medi­care from a guar­an­teed ben­e­fit model to an in­sur­ance pre­mium sub­sidy sys­tem.

Mean­while, the House Ways and Means Com­mit­tee—which has ju­ris­dic­tion over the Medi­care pro­gram—ap­proved mea­sures that the tax panel will sub­mit to the House Bud­get Com­mit­tee as ways to re­duce the na­tion’s debt and deficits. Last year’s Bud­get Con­trol Act es­tab­lished the “se­ques­tra­tion” process to au­to­mat­i­cally re­duce gov­ern­ment spend­ing through across-the-board cuts to fed­eral pro­grams be­gin­ning in Jan­uary 2013. In March, the House passed a fis­cal 2013 bud­get that also in­structed six con­gres­sional com­mit­tees to draft leg­is­la­tion that reaches the sav­ings out­lined in the Bud­get Con­trol Act to avoid se­ques­tra­tion.

One of the pro­pos­als from the Ways and Means Com­mit­tee aims to save $43.9 bil­lion over 10 years by re­quir­ing in­di­vid­u­als to re­pay over­pay­ments in fed­eral sub­si­dies for in­sur­ance ex­changes. As part of the Pa­tient Pro­tec­tion and Af­ford­able Care Act, peo­ple with an­nual house­hold in­comes be­tween 100% and 400% of the fed­eral poverty level are el­i­gi­ble for tax cred­its to help pay for health in­sur­ance pre­mi­ums. But if this pre­mium-as­sis­tance credit is more than a tax­payer is en­ti­tled to re­ceive— based on changes in in­come or fam­ily sta­tus dur­ing the year—then the tax­payer is li­able for that over­pay­ment, which is limited to a spe­cific dol­lar amount, ac­cord­ing to the Joint Com­mit­tee on Tax­a­tion, a non­par­ti­san con­gres­sional com­mit­tee. The rec­om­men­da­tion would repeal this pro­vi­sion, mak­ing the re­cip­i­ent el­i­gi­ble for the full amount.

Ap­pear­ing last week be­fore the Ways and Means Com­mit­tee, Thomas Barthold, tax­a­tion panel chief of staff, es­ti­mated that the pro­vi­sion could re­sult in an an­nual net in­crease of 350,000 unin­sured in­di­vid­u­als.

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