House Committee Postpones Vote On SCHIP Legislation Amid Bipartisan Concerns

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Smoking / Quit Smoking;  Public Health
Article Date: 30 Jul 2007 - 13:00 PDT

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House Energy and Commerce Committee Chair John Dingell (D-Mich.) postponed until Thursday a planned vote on legislation (HR 3162) that would reduce payments to Medicare Advantage plans and increase the federal cigarette tax by 45 cents per pack to fund the reauthorization and expansion of SCHIP and make revisions to Medicare, CQ Today reports. The vote originally was scheduled for Wednesday (Wayne, CQ Today, 7/25). The legislation, called the Children's Health and Medicare Protection Act, would increase SCHIP funding by $50 billion over five years.

Under the bill, a scheduled 10% cut in Medicare payments to physicians would be reversed and physicians would receive a 0.5% increase in fees for each of the next two years. The measure also would freeze reimbursement rate increases to skilled nursing facilities, home health agencies and long-term care hospitals, while increasing by 1% rates to inpatient rehabilitation facilities. The bill would equalize payments between MA plans and traditional Medicare over five years, reducing federal reimbursements by nearly $50 billion over that time period. In addition, the bill would make revisions to the system that sets spending targets for Medicare outlays for physicians' care. SCHIP is set to expire on Sept. 30 (Kaiser Daily Health Policy Report, 7/25).

Republicans were "angry that they had been given less than 24 hours to review" the bill and threatened to use procedural tactics to slow committee review, according to CQ Today. Committee ranking member Joe Barton (R-Texas) accused Dingell of moving quickly on the bill as a way to avoid public scrutiny. In addition, some Democrats "voiced unease" over the tobacco tax increase and the bill's broad scope, CQ Today reports (CQ Today, 7/25). A committee aide said, "Committee members on both sides of the aisle have asked for and have been granted additional time to review the legislation" (Johnson/Bourge, CongressDaily, 7/25).

CBO Report
House Democrats' SCHIP measure would cost $86.8 billion over five years and could cost $160 billion over 10 years, according to a preliminary Congressional Budget Office report released Wednesday. According to CBO, reversing scheduled Medicare reimbursement cuts for physicians would cost $100 billion over a decade, and total spending, including cuts made to private MA plans, would increase by $130 billion over 10 years.

In addition, cuts to MA plans would generate $50.2 billion over five years and $157.1 billion over 10 years, the CBO report states. In a letter accompanying the report, CBO Director Peter Orszag wrote that House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) is revising the legislation, which likely will change the cost and savings estimates.

The report is available online. Note: You must have Adobe Acrobat Reader to view the document.

House Republican Bill
Meanwhile, Barton and other Republican lawmakers on Wednesday introduced their own SCHIP reauthorization legislation that would limit eligibility in the program to children in families with incomes up to 200% of the federal poverty level. States that provide coverage to 90% of children with incomes no more that twice the poverty level could expand eligibility to children in families with incomes up to 250% of the poverty level, according to the legislation.

Barton estimates the measure would cost an additional $5 billion to $10 billion over five years, which he said could be offset through cuts to Medicare and Medicaid. Barton said, for example, beneficiaries and pharmacists could be required to use electronic prescriptions, which might save the programs $3 billion annually. The legislation also would bar states from allowing beneficiaries to exclude certain expenses, such as car payments, from their reported income to qualify for SCHIP. In addition, the measure would cancel SCHIP coverage for adults beginning in fiscal year 2009 and prohibit the federal government from issuing waivers to states to expand coverage of adults (CQ Today, 7/25).

Chances of Passage
While Democrats and many Republicans "agree with the underlying goal" of House and Senate versions of SCHIP legislation, "both chambers are bracing for a conference committee fight over a cigarette tax increase and cuts to private" MA plans, CongressDaily reports. A proposed 45-cent-per-pack cigarette tax increase in the House has been met with resistance from both Republicans and some Democrats, making it "difficult for members to come to terms with" the Senate's proposed 61-cent-per-pack increase. Some lawmakers feel that a 61-cent tax increase is too large and does not provide coverage for enough children, according to House Majority Whip James Clyburn (D-S.C.). In addition, a House provision that provides SCHIP funding by equalizing payments to MA plans likely will meet resistance in the Senate, as it does not have 60 votes to overcome a filibuster, according to Republican aides.

Even if a conference committee is able to reach an agreement on SCHIP legislation, it is unclear how Congress would proceed if President Bush vetoes the measure, according to Rep. G. K. Butterfield (D-N.C.) (Johnson/Bourge, CongressDaily, 7/26). Some predict that SCHIP legislation "could be the first Bush veto to be overridden since he took office," according to the Los Angeles Times (Alonso-Zaldivar, Los Angeles Times, 7/26). However, some Republicans "are not convinced that [Bush] will follow through" on his veto threat (Weisman, Washington Post, 7/26).

Insurers' Response
Health insurers "wasted no time" Wednesday denouncing the House version of SCHIP legislation for its proposed cuts to MA plans, CQ HealthBeat reports. America's Health Insurance Plans President Karen Ignagni said that the House bill would cause "the end of the [MA] program," and BlueCross and BlueShield Association President Scott Serota warned that "millions will pay more and get less and not understand why they have lost this valuable option."

According to Serota, the "massive cuts" in the bill along with an "unprecedented level of government overregulation ... would make it impossible for private plans to continue their partnership with the federal government." AHIP will launch an advertising campaign against the cuts that features actual MA beneficiaries voicing concerns over the cuts. According to the ad, lawmakers who vote for MA cuts are "not too concerned about the millions ... who will be forced to pay more for health care and lose benefits we depend on every day" (Reichard, CQ HealthBeat, 7/25).

Business Coalition
Reauthorization of SCHIP is the first step toward the goal of universal health coverage, Service Employees International Union President Andy Stern, Business Roundtable President John Castellani and AARP CEO Bill Novelli said on Wednesday at a rally on Capitol Hill, CongressDaily reports. Stern, Castellani and Novelli appeared to promote the "Divided We Fail" campaign, which urges lawmakers and presidential candidates to advance universal health care proposals. "It's a meaningful step toward universal coverage, and there is nothing more important than our children," Novelli said. Castellani added, "Our joint message for our political leaders is this: the time for rhetoric is over. It's time to act" (Wegner, CongressDaily, 7/25).

Leavitt Comments
HHS Secretary Mike Leavitt in Utah on Wednesday said the debate between the Bush administration and Congress over SCHIP funding levels is about ideological differences on whether the government or private sector should run the health care system. Leavitt said that the Bush administration supports SCHIP, but it does "not support ... a huge expansion of the program." Leavitt called House and Senate Democrats' proposals to expand the program "radical" and said Democrats were attempting to create a government-run health care system in the U.S. (Burr, Salt Lake Tribune, 7/26).

Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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