Vol 13 January 15, 2010 Health Care Reform BILLS

“Whatever they are talking about,

they are talking about money.”

– repeated by so many physician management consultants that origin is lost

As the post holiday “gift exchange” continues in Congress I find it hard to keep the rising wave of cynicism from submerging the positive accomplishments  of both House and Senate health care reform bills :

Both bills state that the health coverage for all citizens IS a responsibility of the federal government.

Both bills change the standard for evaluating medical advances: “new” advances will be judged against “old” practices, not just against “nothing” (placebo)

Both bills will support initiation of long term care insurance coverage as a voluntary, employee payroll deduction. (using language from Ted Kennedy’s bill (1) to avoid the next health insurance crisis)

Both bills intend to REDUCE the federal budget deficit over ten years.

Of course, “the devil is in the details” (another oft-repeated mantra from physician management consultants), so here some comparative details (2) and comments to help you wade your way to some understanding.

Number of newly insured citizens under the Senate and House bills respectively: 31 million / 36 million

Number of uninsured citizens remaining after bills implemented: Senate 23 million / House 18 million

Number of “newly insured” through expansion of Medicaid (state run health insurance coverage): Senate 14 million / House 15 million

  • Each bill has a different definition of “newly insured” which translates into millions of dollars LESS federal reimbursement for Medicaid enrollees in states, like Massachusetts and New York, that recently expanded their Medicaid coverage themselves. (“no good deed goes unpunished” is another familiar physician management consultant utterance)
  • The federal government now pays each state an average of 57% of their Medicaid costs. Both bills would phase-in increased federal payment to 90%, except, of course, for Nebraska which will get 100% reimbursement of Medicaid costs right off the bat. (see Senator Nelson’s vote and the abortion coverage issue).

“Expanding Medicaid coverage” is done by raising the ceiling of maximum allowable income so that more “poor” become eligible. Maximum amount of annual income allowed for a family of four  in order to be eligible for Medicaid in proposed bills :  Senate $29,327 / House $33,075

Cost over ten years of proposed bills: Senate $871 Billion / House $1,025 Billion

REDUCTION of deficit over ten years associated with these bills as predicted by Congressional Budget Office (CBO): Senate $132 Billion REDUCTION / House $139 Billion REDUCTION

CBO prediction on change in employers’ premiums for employee health insurance under Senate bill: SAME or LOWER

New taxes to help pay for the increased coverage:
.     Senate: 40% excise tax on Cadillac health plans (resisted by unions that have a few members with same and 18 types of workers are explicited exempted from this tax)
.                   “annual fees” on health care companies (drug, devices, insurance companies)
. (Senator Nelson traded his vote also for a “perpetual bye” on the new “annual fee” for Mutual of Omaha and Blue Cross/Blue Shield of Nebraska)(3)
.                    iincrease Medicare payroll tax from 1.45% to 2.35% on incomes over $200,000
.                     10% tax on indoor tanning (replaces proposed 5% tax on cosmetic surgery which AMA fiercely opposed)
.     House: 5.4% surtax on incomes over $500,00 (resisted by CEOs who make this much)
.                   2.5% excise tax on medical devices

Amount of costs to be met by reducing Medicare spending over next ten years: $404 Billion

  • $117 Billion of this savings is from discontinuing the Medicare Advantage plans which cost 14% , $1,100 per year per person, more than regular Medicare (4) and do not reduce utilization, total cost of care nor produce better outcomes.

Coverage of elective abortion with federal funds: NEITHER

  • Senate bill would allow individual purchase of coverage for elective abortion, but only if allowed by the state AND separate premiums would be collected and paid into separate pools of money, one for regular health insurance and one for elective abortion. The state would police this “segregation of funds”.

References:
1.. Boston Globe, 7/19/09, C9, Loretta McLaughlin
2.. NYTimes.com/health care 2009
3. Associate Press, Boston Globe, 12/22/09, A10
4. AARP Bulletin October 2009, p.14

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