Congress Reaches Deal On $789.5B Economic Stimulus Package

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Health Insurance / Medical Insurance;  IT / Internet / E-mail;  Medical Practice Management
Article Date: 13 Feb 2009 - 4:00 PDT

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House and Senate negotiators on Wednesday reached a tentative compromise on a $789.5 billion economic stimulus package that includes some concessions on health care, "clearing the way" for final passage of the package by the end of the week, the New York Times reports (Herszenhorn/Hulse, New York Times, 2/12). According to the Washington Post, "despite the acknowledgement of ceding some ground," President Obama "secured many of his biggest priorities in the legislation, including the longer-term health care and energy investments that the administration views as a down payment on broader reforms" (Murray/Kane, Washington Post, 2/12). Among other provisions, the compromise stimulus package would:

• Provide federal subsidies for health insurance under COBRA that would cover 60% of the cost of premiums for as long as nine months and impose income eligibility limits for the subsidies (Rogers, The Politico, 2/12);
  
  
• Provide $19 billion for health care information technology, with bonuses of between $44,000 and $64,000 for physicians and as much as $11 million for hospitals for the implementation of electronic health records; physicians and hospitals must implement EHRs by 2014 or face the loss of Medicare reimbursements (Hitt/Weisman, Wall Street Journal, 2/12);
  
  
• Distribute 65% of $87 billion in additional federal funds for state Medicaid programs under the current formula and distribute the remainder based on growth in unemployment rates in states (Rubin/Ota, CQ Today, 2/11);
  
  
• Provide $10 billion to NIH for biomedical research (Espo, AP/Boston Globe, 2/11); and
  
  
• Provide $1.1 billion for research to compare the effectiveness of medications and medical devices (Hitt/Weisman, Wall Street Journal, 2/12).

The compromise stimulus package does not include a provision in the House version that would have allowed states to expand Medicaid coverage to recently unemployed workers (Meckler, Wall Street Journal, 2/12).

Prospects for Passage
Some Democratic senators "initially balked at accepting such steep cuts" to provisions related to health care and other areas, but Senate Majority Leader Harry Reid (D-Nev.) "got his reluctant caucus to sign off on a measure many thought should be larger than the $838 billion measure the Senate approved," Roll Call reports (Pierce, Roll Call, 2/12). According to the Washington Times, the three Republican senators who voted for the Senate version of the stimulus package -- Sens. Arlen Specter (Pa.), Olympia Snowe (Maine) and Susan Collins (Maine) -- said that they support the compromise package, "virtually ensuring it will pass" in the Senate (Miller/Sands, Washington Times, 2/12).

In the House, "as many as 20 or more Republicans could break ranks to support" the compromise stimulus package, as the cost has decreased from the $819 billion version passed last month by the chamber without any Republican support, The Politico reports (The Politico, 2/12). However, according to the Post, the "changes did not make much of a dent in Republican resistance to the measure" (Washington Post, 2/12). Congressional Democrats said that the House could vote on the compromise stimulus package as early as Thursday, with a vote possible in the Senate on Friday (Roll Call, 2/12).

Obama, Biden Call for Passage
In related news, Obama on Wednesday during a speech at a suburban Virginia construction site said that the "time to talk is passed" and that the enactment of the economic stimulus package is "both urgent and essential to our economy," the Los Angeles Times reports (Silva, Los Angeles Times, 2/11). Vice President Joe Biden on Wednesday said that congressional Democrats cannot wait for significant Republican support to pass the stimulus package (Levy, AP/Kansas City Star, 2/11).

In an interview with 16 reporters, Obama also said that, despite the lack of Republican support for the for the initial stimulus bills, he believes he can obtain their support for other elements of his agenda, such as health care reform (Fitzgerald, Philadelphia Inquirer, 2/12).

Concerns About Comparative-Effectiveness Research Provision
The provision included in the compromise economic stimulus package that would provide about $1 billion for comparative-effectiveness research has raised concerns about use of the information to ration care, the San Francisco Chronicle reports. Under the provision, the federal government would establish an agency that would help coordinate comparative-effectiveness research.

Supporters maintain that comparative-effectiveness research would "improve quality of care and reduce health costs by limiting the use of drugs and treatments that do not work well," but opponents argue that the "government could use the information to deny certain treatments or ration health care options for patients," according to the Chronicle (Colliver, San Francisco Chronicle, 2/11).

In addition, some health care industry groups have raised concerns about whether language from the House version of the stimulus package that could link comparative-effectiveness research with coverage decisions will appear in the compromise package. The Senate version of the stimulus package "specifically prohibits the government from making any coverage decisions based on this research, or even from issuing guidelines that would suggest how to interpret the research results," according to Senate Finance Committee documents (Carey, CQ HealthBeat, 2/11).

Editorial
"We are ... expected to believe that Democrats will let these additions to their favorite programs," including Medicaid, "vanish after two or three years," but to "believe this, you have to ignore the last half-century of budget politics," according to a Journal editorial. "Spending never declines; at best it merely fails to grow as fast as the economy," the editorial adds. "Far more plausibly, Democrats will take the stimulus increases and make them part of a new, higher baseline for future spending growth," the editorial continues, adding, "Anyone who proposes to cut from that amount will be denounced as 'heartless' and Draconian." Continuing to fund "19 of the most politically untouchable programs," including nutrition programs, Medicaid and cancer research at NIH, "at their new stimulus levels" will increase federal outlays and tax entitlements by $1.59 trillion through 2019, the editorial states (Wall Street Journal, 2/12).

Opinion Piece
The "Senate's compromise bill was the essence of preferring the illusion of moderation over substance," Post columnist E.J. Dionne writes. He continues, "By stripping out of the House bill significant amounts of fiscal help to the states, school construction money and other forms of spending, those so-called moderate senators who provided the key votes made the proposal far less stimulative." Although the "final agreement got some of that spending back by paring down a few of the questionable tax cuts the Senate had added to the bill, ... it still fell short, notably on assistance to the states and on money for health coverage," according to Dionne. He continues, "There is nothing wrong with a sensible centrism that tries to balance competing goods," but the "sensible center should be defined by what works, even if that means discovering that the true middle ground isn't where we thought it was" (Dionne, Washington Post, 2/12).

Broadcast Coverage

• CNN's "American Morning" on Wednesday reported on concerns that the provision reportedly included in the compromise economic stimulus package that would provide funds for comparative-effectiveness research could allow the federal government to limit health care options for patients. The segment includes comments from Senior Medical Correspondent Elizabeth Cohen (Chetry, "American Morning," CNN, 2/11).
  
  
• Fox News' "Special Report With Bret Baier" on Wednesday reported on a provision in the Senate version of the stimulus package that would establish a committee to evaluate the effectiveness of biomedical research funded by the federal government. The segment includes comments from Sens. Tom Coburn (R-Okla.), Ben Cardin (D-Md.) and Jon Tester (D-Mont.), as well as Besty McCaughney, an adjunct fellow at the Hudson Institute (Rosen, "Special Report With Bret Baier," Fox News, 2/11).

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