Dueling budget plans
Dems, GOP versions clash, but both target deficit
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.