Showing posts with label S-CHIP. Show all posts
Showing posts with label S-CHIP. Show all posts

Tuesday, February 19, 2008

Bush Administration Now Willing to Increase SCHIP Spending by $19 Billion Only Weeks After Vetoing a Bipartisan Compromise

At a February 7th Senate Finance Committee hearing, HHS Secretary Leavitt testified about the 2009 Bush budget request.

This time, the Bush Administration is asking for $19.3 billion more for SCHIP over the next five years.

Just a few weeks ago, President Bush vetoed the $35 billion bipartisan SCHIP extension yet again. Bush and Leavitt maintained all of last year that the program should be extended by only $5 billion over five years.

SCHIP is now operating under a temporary deal that funds existing kids until March of 2009.

Summing up the Senators incredulity over the turnaround, Ranking Republican Senator Chuck Grassley (R-IA) said, "The fact that the President said we only needed $5 billion carried a great deal of credibility with about three-fourths of the people on the Republican side of the aisle. We didn't get the bipartisan compromise that the President could sign, and we would have been able to do that if this had been acknowledged a year ago."

Leavitt answered that the Bush administration had recalculated things saying, "We have better estimates now."

Wednesday, January 2, 2008

The Budget Outcome--Everything Was Decided and Nothing Was Decided

The Budget agreement, SCHIP, the Medicare Physician Fee Cut, and Medicare Advantage HMO payments.

For months, I have been telling you four things:
  • The federal budget impasse would be resolved because Democrats and Republicans weren't going to go home without their earmarks. In predicting the budget outcome you might recall my telling you to follow the "pork."
  • SCHIP would not be allowed to expire and would be extended.
  • The 10% Medicare Physician Fee cut would be avoided just as it has been for a number of years in a row.
  • Democrats were adamant about cutting Medicare Advantage payments as a means to pay for the Medicare physician fee cut and seeing the program's payments ultimately equalized with the traditional Medicare program.
This was a great year for earmarks or "pork-barrel spending." When the day was done about 9,000 earmarks were inserted in the final bill in addition to about 3,000 more that were in the earlier defense appropriations bill--bringing the total to about 12,000!

The Democrats wanted $22 billion more in domestic money than President Bush wanted--about a 2% difference. The Democrats later offered to "split the difference" looking for $11 billion more--which Bush quickly rejected. In the end Bush got his cap--but they also agreed to about $11 billion more in "emergency funding" above the cap.

The Democrats also made Bush pay by cutting many of his favorite programs to get in under his cap. The alternative minimum tax (AMT) fix had no funding so will add $50 billion to the budget deficit. All told, funding for the war on terror, the AMT gap, and the rest of the spending will give us a whopping budget deficit of $240 billion next year.

If you are wondering just what got decided here, who really won, and what's different, you aren't the only one.

On the health issues:

SCHIP has been extended to March 2008. The Congress and the President have allocated enough money that children now covered will be able to stay in the program. There is some disagreement about whether new CMS rules might result in some cuts but CMS is showing no inclination to force any kids off the plan in an election year.

The bipartisan agreement to expand SCHIP from the current six million kids to ten million by spending another $35 billion ended up being shelved after the President vetoed that deal twice and the Democrats fell about 10 House votes short in their attempts to override him.

The docs did not get their January 10% Medicare fee cuts and instead got a half percent increase.

The bad new for the docs is that they only got a six month reprieve this time--until July 1, 2008. I see no reason to believe the Congress won't again find someplace to get the money it will need to defer the cuts to January 1, 2009.

But on January 1, 2009 the docs will face a whopping 15% cut--the 5% from last year that is funded only until July 1, this year's 5% cut that was also deferred only until July, and a new 5% cut the Sustainable Growth Rate Formula (SGR) will automatically create on January 1, 2009.

The Congress has fixed nothing for the docs, they have only pushed the pending cuts forward by six months--and most likely twelve months until January 1, 2009.

Just before the holiday recess, we thought we had a twelve month doc fix that would have been funded by taking the extra six months money from the "double dip" payments Medicare Advantage plans pay to teaching hospitals. But it wasn't the health plan lobby and conservative Republicans that KO'd that Medicare Advantage cut--it was a powerful Democrat looking to protect his local medical centers.

The big teaching hospitals have always had some of the most powerful allies in Congressional delegations from states like Massachusetts and New York where some of the nation's leading medical centers are based and some of the most powerful Democrats hail from. That was the case this time as the medical centers prevailed on the Chairman of the House Ways and Means Committee, and New York Congressman, Charlie Rangel, to kill that idea.

With the extra money cut by Rangel, and time running out, the only out was to use what money they had for just a six month fix and later try to find more funding by July of 2008.

As a result, the Medicare Advantage (MA) plans suffered no material cuts. It was clear that any real cuts would run into a Bush veto with the same fate as the two SCHIP bill votes. In the Senate, where 60-votes would have been necessary for any bill that contained MA changes, there had already been tacit agreement among Republicans to a one-year doc fix and some MA cuts. The big difference was an intransigent President who wasn't going to budge on this issue and later objections from Rangel.

Because of these agreements, payments to the MA plans should be safe until January 1, 2010 because CMS will have set the 2009 rates by the time the 2009 budget is dealt with later next year.

Does this mean that Medicare Advantage plans have won and will not have to worry about any big cuts?

Hardly. This was a draw.

Bush held the cuts off. Bush is a lame duck. The Democrats are more intent than ever on getting back on this one and cutting the Medicare Advantage "over payments."

George Bush may not have to sign the 2009 budget and therefore be a factor in next year's negotiations. It would be a simple matter for continuing resolutions keep the government going a month longer than they did this year--to inauguration day and a new President in late January.

Late in 2008, the docs will be facing a 15% Medicare fee cut on January 1, 2009, SCHIP will be out of money a few months later on March 1, 2008, the extra payments to Medicare Advantage plans will present the same plump target, and we will know who won the November elections.

I heard someone say recently that with every additional year of the extra Medicare Advantage payments there will be more seniors on the plans and it will be politically more difficult to cut them. That misses an important point--the docs are facing a 15% cut and if they don't get the money from the HMOs they will get it from other providers. AARP, the AMA, the hospitals, and about every other provider organization can agree on just one thing here--get the money from the Medicare HMOs. AARP can rally a lot more seniors than the insurance industry can.

The Medicare physicians held off some big fee cuts for likely another year, the Medicare Advantage HMOs held off any real cuts to their programs but are far from safe going into 2010, and the kids have their health plan until March.

No one won.

It's a "do over."

Wednesday, November 28, 2007

One Heck Of A Budget Mess and Lots of Ugly Consequences--But Watch The Pork

With the Congress set to come back to attempt to break the budget impasse in the few weeks before the holidays, many in this town are ready to see the Congressional Democrats and President Bush agree to disagree and let the budget problems slide for a year under a series of lengthy continuing resolutions (CRs).

The problem with CRs is that they only allow the agencies and programs to continue at past spending levels. Inflation cuts into the value of those past budgets and there aren't any opportunities to modify priorities.

In health care, which is especially hard hit by higher inflation, it would be an especially problematic period:
  • The Medicare physicians are going to get a 10% fee cut on January 1st if the Congress can't pass a budget bill with a fix in it for them. Undoubtedly, a big fee cut would mean lots of cost shifting to the rest of the health care system by the docs as new provider contracts are negotiated. The proposed solution for the docs is to cut private Medicare HMO payments to come up with the money.
  • The State Children's Health Insurance Program (SCHIP) has been operating on a CR since September 30th. But freezing the program at current levels causes some big problems.
  • California will have to decide what to do with as many as 600,000 kids who could lose SCHIP coverage--56,000 on January 1st.
  • Georgia is already making up for federal shortfalls in its SCHIP program. Administrators are reportedly wondering if they should hold off on starting kids on six-week chemo treatment plans if they only have four weeks of coverage left because of the budget shortfall in SCHIP.
  • The National Institutes of Health (NIH) budget hasn't been increased since 2003. This year it was supposed to get a $2 billion increase in its $30 billion budget but that is in limbo as Congress and the President fight the big budget battle.
You will now see a number of new Congressional attempts to move these budget items including the possibility that a modest SCHIP extension, the doc fix, and Medicare HMO cuts will all get lumped into one very hard to vote against or veto bill to save the kids' health insurance coverage.

But here is the biggest reason the Congress just might find a way to come up with the votes to get the budget unstuck: pork.

No spending bills--no pork and Republicans love pork every bit as much as Democrats. Don't forget, the "bridge to nowhere" was purely a Republican item.

The next few weeks will be full of drama, brinksmanship, and deals.

Will we get a budget deal when the day is done?

Watch the pork.

Friday, November 16, 2007

SCHIP, Medicare Physician Fee Cuts, and Medicare Advantage--We're Getting Down to Crunch Time

Since September of 2006, I have been pointing to this year-end as the time that would require some big budget decisions impacting SCHIP, the scheduled 10% Medicare physician fee cut, and corresponding Medicare Advantage cuts to health plans to pay for the doc fix.

Guess what? New Year's is just over six weeks away.

For now, each of these issues is bogged down in the overall budget stalemate between Congress and the White House.

Work to get enough Republicans to help the Democrats override the Bush veto of the SCHIP bill is stalled and is not going to be accomplished before Thanksgiving. The problem now is that the Democratic leadership has shown a willingness to toughen up the bill over eligibility and citizenship requirements to please the Republicans only to have the "TriCaucus"--that includes the Congressional Black Caucus, Asian Pacific American Caucus, and Hispanic Caucus--say they won't vote for a SCHIP bill that has given up too much.

Just before the Thanksgiving recess, Democratic leaders made a major push to get an agreement with enough Republicans to override the Bush veto but were not able to find common ground. They will try again in December but the fact that with such great effort they were not able to get it done this week does not bode well.

As I have told you before, the doc fee cut problem and corresponding proposed Medicare Advantage insurer payment cuts are going to be worked out in the Senate Finance Committee. Ignore everyone else, that is where any deal will be done.

This week, Democratic Senate Finance Chair Max Baucus said he is getting ready to release a bill that fixes the 10% physician cut for 2008 and the next scheduled cut of 5% in 2009. To do so, he would cut Medicare Advantage payments by about $20 billion. His bill would also spend more on rural seniors and cut home oxygen providers and home health care.

On the Republican side, ranking Republican Senator Grassley said he would rather see a one-year fix to the Medicare physician fee problem and a smaller Medicare Advantage cut----likely thinking it will be easier to get something that either the White House approves or can be overridden if it is vetoed.

No consensus has yet been achieved--and then there is the White House to deal with.

In the meantime, the SCHIP bill is operating under a continuing resolution (CR) until December 14th--which can be easily extended. However, the longer this goes on the more states that will run short of SCHIP money and have to cut kids--all of which will be on the front page of the local newspapers. The CR money isn't enough to sustain current enrollment levels for long.

The Medicare docs get cut 10% on New Year's day unless a deal can be reached.

There will be a deal in the Congress on the doc cuts and Medicare Advantage and it will occur later in December than earlier. It might even slide into the early part of the New Year with a retroactive effective date to January 1.

Yesterday, the House fell just two votes short of overriding the Bush veto of the Labor/HHS spending bill. It is clear that the Dems have not yet found the combination necessary to get those last few Republican votes to get a SCHIP or budget bill.

The Democrats are now talking about combining all of the ten remaining spending bills into one giant bill. They are saying they would "split the difference" in the total budget disagreement with Bush, pass it, and then fight it out. It is likely that any doc fix and Medicare Advantage cuts will be caught up in that.

On timing, the only thing that is certain is that no member of Congress will miss a holiday dinner. Kids might lose their health insurance though.

The nice thing about the 12-year Republican rule of Congress is that they knew how to run a "railroad." Maybe they spent "like drunken sailors" and kept votes open until 4 am while they beat their people up, but they knew how to enforce discipline in their ranks and get bills passed in time to catch the last plane out of town.

I think I miss Tom DeLay!

Wednesday, November 7, 2007

What Will It Take to Get a SCHIP Bill This Year? The Budget Outlook Deteriorates Even More

Democratic and Republican negotiators are hard at work to get an agreement on the State Children's Health Insurance Program (SCHIP) extension.

The current SCHIP bill failed to get a veto-proof majority in the House.

President Bush has said there is no way he will sign a SCHIP bill with a tax increase in it--the current bill would increase the per pack cigarette tax by 61 cents.

The only way the Democratic leadership can pass a veto-proof SCHIP bill is to peel off enough Republicans to have the two-thirds necessary--something they have already accomplished in the Senate and need about 10 votes to do in the House.

First, the conversations between the needed Republicans and the Democrats don't include dropping the cigarette tax. Bush is on his own on that one.

The deal can be done if Democrats assure the Republican fence-sitters of two things:
  1. That only citizens and documented immigrants will be eligible--that these rules have been significantly tightened-up.
  2. That the first priority is covering kids below 200% of poverty, before 300% of poverty. The Republican House leadership wants 90% of children in families below 200% of poverty covered before going to 300%. However, getting it that tight won't be necessary to get enough Republicans to accomplish two-thirds support in the House.
More than anything, Congressional Republicans want to get this off the table--they are not winning in the polls.

Even more, the regular 2008 budget process continues to deteriorate. Federal department and agency heads have already been put on alert to the possibility that the federal government will be operating on temporary "continuing resolutions" for as long as February 15th.

The Democrats' recent attempts to couple the Labor/HHS spending bill with the Veterans/Military Construction bill has not only flopped but backfired with the fence-sitting Republicans they needed to attract, making the already contentious budget process even worse.

President Bush has said he will veto at least 10 of the 12 upcoming appropriations bills and it is clear the Democrats have yet to find the formula they will need to overcome those Bush vetoes.

The upcoming January 1, 2008 Medicare physician fee cuts and proposed Medicare Advantage cuts to pay for that fix have yet to be dealt with. I heard someone on the Hill say the other day that it looks like that issue combo will be the last two things to be dealt with in what is turning out to be a more and more problematic budget process.

But don't let all of this budget news convince you they won't be dealt with. If the doc cuts aren't reversed, the fall-out will be significant.

Tuesday, October 30, 2007

Bush Ups the Budget Pressure--Shows No Sign of Compromising on SCHIP

President Bush just made a statement on the SCHIP bill and the upcoming 2008 budget votes. Standing in front of the White House with the Republican leaders behind him, he blasted the Democratic Congress, the recent SCHIP bill passed by the House, and rumored efforts on the part of Democratic leaders to couple defense and Iraq spending bills with domestic budget bills.

The bottom line is that the SCHIP and 2008 budget efforts look to be more contentious then ever.

The Democrats really screwed up the SCHIP vote in the House last week. Rather then reach-out to fence-sitting Republicans before the latest House SCHIP vote, the Dems overplayed their hand and tried to ram a purely Democratic new version of the SCHIP bill down the Republicans' throats. That all backfired and the result was a vote well short of what they will need to override the coming Bush veto.

Dems are now trying a do-over on that mistake as they now reach-out to Republicans in both the House and Senate, as they should have done last week, in an attempt to get an improved SCHIP bill. Most of these discussions are around fine-tuning the 300% of poverty limit on who can be eligible for benefits.

But this morning Bush took as hard a line as he could.

It is possible that the Democrats can get enough votes behind another version of SCHIP.

But it also looks like we are headed for one heck of a budget mess.

Friday, October 26, 2007

House SCHIP Vote Fails to Attract Veto-Proof Majority

Yesterday evening, the House passed a slightly modified version of the SCHIP bill President Bush vetoed last week, this time by a vote of 267-142. That is still likely at least 7 votes short of the two-thirds needed to overturn the expected Bush veto.

The bill now goes to the Senate.

It is possible that both sides will try to work out a compromise--but not likely.

Expect the Senate to pass it, Bush to veto it, and another uphill Dem attempt to override.

SCHIP is currently operating under a continuing resolution at current funding levels and will continue to do so indefinitely.

The SCHIP battle portends much the same sort of contentious battle for almost all of the upcoming twelve 2008 appropriations bills.

The newer version of the bill makes no major changes to the bill Bush vetoed earlier this month:
  • The bill clarifies the eligibility cut-off for kids in families above 300% of the federal poverty level -- about $62,000 for a family of four this year -- with the exception of any state that is now operating above that level.
  • The bill is explicit in stating that undocumented aliens are not eligible for federal funding.
  • Adults without children will be phased out of the program over one year, rather than over two years, which was previously proposed.
What the Democrats have accomplished is to keep this issue in the headlines for a couple of more weeks as the upcoming Senate vote and Bush veto work their way through the process.

They have also undercut some of the major Republican arguments against the bill with the minor changes. The most significant of those were charges that the SCHIP bill covers middle-class families. The new bill has a clear 300% cap. Bush has already said he will agree to a 300% limit--albeit with firm rules on getting almost all kids under 200% covered first. Republicans had been critical of the first bill saying it would cover illegal aliens and adults and those things have been clarified.

The Dems still want to spend $35 billion more on the SCHIP renewal and Bush has upped his offer from the original $5 billion more to $20 billion more.

Even sympathetic Republicans were ripped that the Dems pushed this to a vote so quickly and without a lot of Republican advice on how to improve the bill. Done more carefully, the Democratic leadership might have come up with the votes they needed.

The Democrats may have also pulled a parliamentary maneuver to get them a better margin by holding the vote when a number of California Republicans were back home because of the wild fires. Republican House Minority Whip Roy Blunt (R-MO) said Pelosi should have delayed the vote on SCHIP due to the fires in California. "Unfortunately, the speaker announced plans today to hold an important, and contentious, vote on SCHIP while these members are confronting serious issues at home - disenfranchising, in effect, a large segment of the most populous state in the union, and throwing into doubt the integrity of the vote."

Republicans are feeling the political pressure and the Democratic efforts to make them pay a political price aren't helping the atmosphere up on the Hill just as we are about to head into the most contentious budget season since the Gingrich efforts to shut the government down in a budget fight with Clinton.

You would think the two sides are close enough to find common ground.

We should not forget that Clinton vetoed welfare reform twice before getting, what was for him, a better bill and declaring victory.

Wednesday, October 24, 2007

Democrats Pushing to Vote on New SCHIP Bill This Week--Bush Starting to Give

Democratic attempts to modify the SCHIP bill just enough to pick off the seven more Republicans they need are intensifying.

The House failed to override Bush's veto by 13 votes last week.

Yesterday, Bush's lead person on the SCHIP issue, HHS Secretary Leavitt, said the administration is now willing to consider covering kids up to 300% of poverty--they had said they would not go above 200%. Leavitt also said that would likely mean another $20 billion in spending--Bush had offered only $5 billion at the start.

But the Democrats, smelling blood in the water, are holding at $35 billion in additional spending and the full 61 cent tobacco tax to pay for it.

Leavitt also said that the administration still opposes new taxes and that states need to cover kids below 200% of poverty before moving past that point to 300% of poverty.

Now the pressure is on for Democratic House leaders to find those other seven Republican votes. If they get them, anything Bush and Leavitt are offering is moot.

If Bush had offered this a month ago, he'd probably have had a deal and avoided a very unpopular political decision.

If the Democrats find the votes, it is going to put them on one heck of a roll as we head into budget season. That could be really good news for the doctors worried about that 10% Medicare physician fee cut and bad news for the health plans worried they are going to pay for it out of their Medicare Advantage payments.

Tuesday, October 23, 2007

The Fight Over SCHIP Tells Us This Budget Season is Going To Be One Big Food Fight--Medicare Payments to HMOs and Physicians Are in the Middle of It

Now that the House has failed to overturn President Bush's veto of the SCHIP bill by just 13 votes, Democrats are looking to tweak the $35 billion expansion of SCHIP just enough to get the extra Republican votes they need to get their bill passed.

The House Democratic leadership is now in discussions with Republican House members who voted with their President last week and who might be persuaded to change sides in the next round. The focus of these discussions is on capping the enrollment for families between 200% and 300% of the federal poverty level and clarifying the bill's language so that there is no doubt that SCHIP is closed to undocumented immigrants.

While House Republicans and the President have said they are interested in a compromise they continue to argue that no one should be covered above 200% of the poverty level. That does not represent any movement from their original position.

Neither side appears to be interested in any good faith movement toward the middle. Democrats are more than happy to just keep sticking this issue to Bush and the Republicans on the eve of an election-year. The President and his allies, encouraged about polls that show support for limiting coverage closer to 200% of poverty, appear happy to continue hammering away with their newfound fiscal discipline.

Beyond SCHIP, this tells us the rest of the budget process is really going to be ugly. President Bush has already said that he intends to veto every one of the 12 domestic appropriations bills the Congress is working on because they exceed his spending limits. The President originally asked for a total of $933 billion in the 12 bills for fiscal year 2008. The Democrats are in the process of giving him $22 billion more than that. Bush says that this level of spending would ultimately balloon to $205 billion more than he asked for over five years.

We could relive the SCHIP veto fight 12 more times this fall!

Caught up in this will be a number of key health care issues including the automatic January 1, 2008 9.9% Medicare physician fee cut, proposed cuts to Medicare Advantage HMO payments to fund the Medicare physician fee fix, and Medicare payments to hospitals, nursing homes, durable medical equipment vendors, and other providers.

As I have said before, the 10% Medicare physician fee cut will not take place and the debate over payments to Medicare Advantage plans will be right in the middle of that solution. The year-end omnibus budget bill will be the vehicle that likely deals with this. That bill is one that is almost completely controlled by the Democratic committee chairs--no real Republican input, no need to get 60-votes in the Senate. The President can also veto this one but the final budget bill is usually loaded up with things the White House will want very badly.

It will be a fascinating fall.

When the day is done, Democrats may have to be happy to just get by in 2008. This could well be the last budget George Bush has anything to do with. The Democrats are looking forward to a new President in the White House in January of 2009 and ready to sign a 2009 budget. They are confident she will see things their way--especially on health care.

Thursday, October 18, 2007

SCHIP Veto Override Fails in the House--Now What?

As expected, the SCHIP veto override effort in the House failed by a vote of 273-156--thirteen short of the two-thirds necessary.

Now what?

First, SCHIP will not expire. A continuing resolution funds the program at current levels until mid-November and that can likely be extended indefinitely. However, at current levels hundreds of thousands of kids will eventually fall off the program.

The Democratic leadership has two choices:
  • They can send the President essentially the same bill again. Some Dems want to do that early next year so he can veto it again in an effort to keep the issue alive and festering as we go into the election-year. Their assumption is that Bush's position is very unpopular and will continue to be so.
  • The Democrats can go back to their Republican allies on SCHIP and try to get a smaller extension deal Bush will accept. The President has said he is willing to move off of his position of spending only $5 billion more to a one that would at least keep those kids who are on the program funded. While the vetoed bill would have spent $35 billion more, a bill that would maintain the program at current levels would cost closer to $15 to $20 billion in additional funds over five years.
The Democrats should be worried about overplaying their hand.

A recent USAToday poll found that 52% of voters trusted the Democrats more on SCHIP. But when asked if the program should be limited to poor families below 200% of poverty (Bush's position), 52% said they agreed. In addition, 55% said that they are very or somewhat concerned that the higher SCHIP limits in the vetoed bill would create an incentive for families to drop private coverage.

The bottom line is that the Democrats have won the public opinion battle over SCHIP so far. But, it looks like the tide could turn.

The Congress also has 12 appropriations bills they have yet to pass which call for more spending than the President has asked for. Bush has threatened to veto all of them. After his SCHIP veto, no one doubts him. The budget is going to be a tough battle for both sides--a really tough battle.

During the next couple of months, Democrats have as much risk ahead as do Republicans. The President and Republicans may have come off as the "scrooge" in the SCHIP debate so far but those poll numbers showing little support for SCHIP beyond 200% of poverty give Republicans hope the tide can change as they try to paint the Democrats with that old "tax and spend" brush.

The Congress also has the final omnibus budget bill ahead where they will likely to deal with the 10% Medicare physician fee cuts that are going to happen on January 1 if something isn't done. Medicare Advantage payments to HMOs are still very much a part of that issue.

We only have ten weeks left in the year and a lot of tough work--and tough strategy decisions--ahead!

The fact that President Bush has said that he is willing to compromise on SCHIP--and spend more--indicates that he is willing to talk and this does not have to be part of a budget fiasco.

It doesn't have to be, but it might.

Why Bush is So Ready to Use the Veto Now When He Never Did When Republicans Were "Spending Like Drunken Sailors"

This from an article in today's Washington Post stood out for me:
"President Bush declared yesterday that he remains 'relevant' despite his political troubles, and he derided Democrats for running a do-nothing Congress that has failed to address critical domestic, economic and security issues in the nine months since they took control of Capitol Hill."
Back on August 2nd, I did a post, Why Is President Bush So Willing to Veto Spending Bills All of a Sudden?

In that post, I referred to a news conference then President Bill Clinton had in the wake of the 1994 Republican landslide and takeover of Congress. Clinton went out of his way to tell everyone he was still "relevant."

I have believed for months that President Bush's newfound fiscal conservatism and willingness to use a veto--given that for six years he stood by and watched the Republican Congress "spend like a bunch of drunken sailors" and never once used his veto pen--is as much about his wanting to be "relevant" in the wake of the Democratic takeover of Congress as anything.

Yesterday, in his "Clintonesque" news conference he confirmed it.

Thursday, October 4, 2007

SCHIP Supporters Are At Least Ten Votes Short to Override a Bush Veto

The Democrats are now going to take two weeks to try to change some minds before they attempt to override the Bush veto of the SCHIP bill--scheduling a vote for October 18th. If nothing else they will continue to hammer on the President and his Republican supporters over what is turning out to be a very unpopular stand by the President.

The Senate approved the SCHIP compromise by a vote of 67-29. SCHIP supporters would need 67 votes to override the President's veto. The Senate should be able to hold at that level--albeit with no margin for backsliding.

But, the numbers are not on the side of a veto override in the House.

The House originally passed the SCHIP bipartisan compromise 265-159 with 45 Republicans voting for it and eight Democrats voting against it.

To override, the bill's supporters are going to have to find 290 votes for it.

147 Republicans have just signed a pledge to stay with their President on this. That means that even if all Democrats now vote for the bill and 147 Republicans vote against it, supporters would have 288--two short.

Assuming that all of the Republicans who did not sign the pledge can be persuaded to vote for the override, supporters are also going to have to change the mind of every Democrat who voted against it and get at least a couple of Republicans who signed the pledge to change their minds--or find some other combination that yields them at least 10 more votes.

Not impossible but really hard.

If the veto is not overridden, the two sides will find a way to continue SCHIP at least at current levels. Not even President Bush wants any stories about kids who are covered today losing their coverage.

Friday, September 28, 2007

If the $35 Billion Expansion of SCHIP is About Moving to Government-Run Health Care Why Does the Insurance Industry Support It?

Both the House and Senate have now passed the $35 billion expansion of SCHIP. The House by 265-159 and the Senate by a vote of 67-29. The Senate bill got exactly the two-thirds it needs to override the expected Bush veto and the House fell 25 votes short of the 290 it will need.

Opponents of the bipartisan compromise to renew and expand the State Children's Health Insurance Program primarily argued that this expansion was really about a big step toward government-run health care.

But the whole of the insurance industry supports it--both America's Health Insurance Plans and the Blue Cross Association.

Opponents have said that the program has grown well beyond its original intent to cover only children below 200% of poverty. That is correct. But SCHIP is a block grant program. The feds give the states a chunk of money and then give them a great deal of flexibility in how they use it. In fact, the Bush administration has approved many of these exceptions. While New Jersey has really pushed things by covering kids in homes up to $80,000 (four times the poverty level) that is an aberration. In fact, the bipartisan bill reduces federal funding for states that enroll children above 300% of poverty, prohibits the feds from approving any more states from covering parents, and phases-out state coverage of childless adults--pretty much all of the things opponents are complaining about.

Opponents also argue that we still haven't covered all of those below 200% of poverty and therefore shouldn't be covering anyone above that level. But, the bipartisan bill calls for states not meeting enrollment goals to begin losing money for those covered above 300% of poverty by 2010.

Block grants are a Republican idea. When the Bush administration tried to reform Medicaid a few years ago by employing block grants they thought it was a good idea and a lot of Democrats didn't like it.

Block grants are a way to give states a lump of money and encouragement to find the most imaginative way to use the money.

But here is George Bush now telling all of these states--most of which his administration gave the go-ahead to--that he's from Washington and he knows better!

Yes, it will cost another $35 billion--the President favors $5 billion more. But he had no trouble finding almost $200 billion this week to fund the war.

Critics argue that the 61 cent tax on tobacco can't be trusted to fund the program because it will lead to a reduction in smoking and revenue falling short of projections. Now there's a problem--the tax results in a reduction in smoking. They argue that it is an unfair tax on the poor. Well it's a tax on behavior that costs the rest of us tons of money when they become uncompensated care or fall back on Medicaid. Looks to me like if there ever was a fair tax on the poor this is it.

SCHIP is not perfect and New Jersey is an example of a state that has gone well beyond the original intention--although they might tell us they have made the money go further than anyone else.

But in this frustrating area of health care it is also an example of:
  • Something that has worked for 6 million kids.
  • Doing what all of those Republican presidential candidates support--giving states more flexibility to find local solutions that are not "one size fits all health care."
  • A bipartisan deal when Democrats and Republicans don't otherwise seem to agree on anything.
The White House says this is about drawing a line in the sand over the expansion of government health care and a chance to take a different direction by passing the President's proposals to use the tax code to enable the near poor to buy their own coverage in the private market. But the fact is George Bush made no effort to do that in the six years his party had the White House, the Senate, and the House. To think he can do it now with Dems in control of the Congress is simply foolishness.

Then there is the fact that he says this is government-run health care but the whole of the insurance industry supports the bipartisan bill.

A big reason the insurance industry supports the bill is because the states are using private insurance to deliver the SCHIP benefits to children! The Republicans have started the privatization of government health care--Medicare Advantage, Part D, Medicaid in many states, and SCHIP.

SCHIP is largely a government-run program provided through private insurance companies.

In the end, President Bush is going to compromise. He will likely go along with funding that will at least maintain the program at current levels--albeit nowhere near the $35 billion.

But on the way to doing that he, and the conservative Republicans, are politically shooting themselves in the foot going into an election-year in ways that are just unfathomable.

Thursday, September 20, 2007

Medicare Advantage Cuts Still on the Table to Offset the Medicare Physician Fee Fix

The House/Senate deal to renew the State Children's Health Insurance Program (SCHIP) does not include a fix to the January 2008 10% Medicare physician fee cut. It also doesn't include the $51 billion in cuts to the Medicare Advantage (MA) program the House had in their bill to pay for that fix and other Medicare improvements.

As I have said many times before, that only means that the Medicare physician fix is going to get booted to the year-end budget work--the docs aren't going to get a 10% fee cut.

The big question is just how big will the MA cuts be in order to pay for the doc fix.

The key Senator in the middle of all of this is Max Baucus (D-MT)--the Senate Finance Chair. He is much more moderate on the Medicare Advantage issue than his counterparts in the House. I have long believed where Baucus comes out on this is the place where a compromise will be found.

This week, the Wall Street Journal quoted Baucus as saying he is contemplating cuts in payments to Medicare Advantage insurers that are "not as much" as the cuts that were passed by the House. "But some," Baucus said, "It will be significant."

The House wanted to cut $51 billion over five years beginning in 2009.

The Senate will be more concerned about maintaining payments in rural areas and will have a more favorable view of the standard Medicare Advantage plans. The sore point will likely be the insurers who have been gaming the Private Fee For Service payment system in urban markets.

The House still wants huge cuts. Speaker Nancy Pelosi this week said, "Do we want to stop the privatization of Medicare? Yes." That's pretty clear.

This will all be decided at year-end when the Democratic committee chairs have almost total control of the budget process.

So, the Dems in the House want to stop the privatization of Medicare and Baucus wants "significant" cuts.

Talk about a rock and a hard place!

Monday, September 17, 2007

SCHIP Agreement "Near"

There are a number of published reports indicating that the House and Senate have reached an agreement to extend SCHIP along the lines of the earlier bi-partisan Senate agreement.

That would mean a $35 billion SCHIP expansion paid for entirely be a new 61 cent tobacco tax.

Bush says he would veto such a deal. While the Senate seems veto proof on this one, the House is another matter.

If Bush is successful in vetoing the latest compromise, then we will see a temporary extension of SCHIP and the longer-term solution will be booted to the year-end budget work where it is now certain that the Medicare Advantage payments and the upcoming 10% Medicare physician fee cut will be dealt with.

There is a real chance that there will be a huge budget showdown between the Democratic-led Congress and the President late in the year throwing all of these issues into doubt.

Those of you who read this blog know that this is what we have been predicting.

Earlier post and SCHIP history: SCHIP Negotiations Not Going Well--Medicare Physician Fee Cuts and Medicare Advantage Payments Hang in the Balance

Sunday, September 16, 2007

SCHIP Negotiations Not Going Well--Medicare Physician Fee Cuts and Medicare Advantage Payments Hang in the Balance

Negotiations between the House and Senate over how to extend the State Children's Health Insurance Program (SCHIP) before its September 30 deadline are not making much progress.

The Senate passed a bipartisan extension of the plan that included $35 billion in new spending and paid for it with a hefty 61 cent per pack tobacco tax.

The House passed a solely Democratic bill that would spend $60 billion on the SCHIP extension as well as fix the upcoming January 2008 10% Medicare physician fee cuts. The House would pay for its bill with a smaller tobacco tax and a phase-out of "extra" private Medicare payments beginning in 2009.

With confidence, I can tell you the following:
  1. The negotiations aren't over. Just like the typical high school student, Congress tends to leave things to the very last minute. It is still possible a deal can be struck before September 30th.
  2. If a deal isn't done, SCHIP will get a temporary funding resolution past the September 30th deadline to keep the program going at current levels--it isn't going to abruptly end.
  3. The docs aren't going to get anything like the upcoming 10% fee cut they are facing on January 1--the doctor lobby is way too powerful to let that happen.
  4. Medicare Advantage cuts will fund at least the resolution to the doctor fee problem.
How much of this happens in September and how much of this gets booted to the year-end final budget clean-up where Democratic committee chairmen are almost entirely in control, remains to be seen.

I have always thought the doc cut and Medicare Advantage funding issues would be decided at year-end.

The only hope the health plans have to avoid a Medicare Advantage payment cut is that there is a budget train wreck with Democrats putting up a budget at year-end which Bush vetoes and nothing gets done. A budget train wreck could well leave SCHIP in limbo and the docs with a 10% Medicare physician fee cut and a political mess across the board. It isn't something either Democrats or Republicans want to see going into an election year.

For those of you who have been reading my regular updates on this issue, nothing is going on that is a surprise.

Stay tuned!

The history: SCHIP Reauthorization and High Stakes Politics

A budget train wreck? Why Is President Bush So Willing to Veto Spending Bills All of a Sudden?

Thursday, September 6, 2007

How Will SCHIP Be Extended and What Will Happen to Medicare Advantage and the Upcoming Medicare Physician Fee Cuts

Health Market Survey publisher Bill Boyles joins us again today. After getting his perspective on the State Children's Health Insurance Program (SCHIP) debate yesterday, I prevailed upon him to put a post together for our readers.

Bill has some very important news on just how this debate, which involves three greatly important health care issues--the SCHIP extension, proposed Medicare Advantage cuts, and the scheduled Medicare physician fee cuts, is coming together:

Dems Seeking SCHIP-Only Deal,

But Not Without A Good Road Map
by Bill Boyles

Key Democratic Chairmen in the House and Senate have instructed their staff to work out a possible road map for how to split off Medicare Advantage (MA) reform from the SCHIP bill, I found out earlier this week. They’ve been working with MA lobbyists to avoid a train wreck when the House-Senate conference meets in two weeks.

The thinking is that the House bill is simply too massive a change to ever work out a deal among Democrats, let alone a bi-partisan agreement within a House-Senate conference committee. That leaves only one option: limiting the conference to the Senate bill and considering the MA stuff separately.

That’s bad news for Medicare Advantage backers. Their main hope has been that neither party will be able to work out all the kinks of a road map compromise, and the whole thing will stall out and fail until 2009.

There’s no way the House Dems will ever agree to just dropping MA, not after sweating blood to get it out of the House (including a final vote margin of one vote that caused Republicans to walk out). But there is a way the House leadership could think about dropping the proposed Medicare Advantage cuts: if there is a pre-nuptial agreement. And the dowry has to include a real list of specifics with what , when, where and how a House-Senate deal takes shape. This is what is being negotiated at the staff level while members of Congress work on their tans. If they succeed it’s lights out for MA plans before the SCHIP vote even happens.

In retrospect, there was a sly hidden logic to House Dems pushing through their MA reforms attached to the House SCHIP bill, something that was criticized by pundits as a hopeless exercise at the time. Now neither party wants the popular SCHIP bill to go down in flames, and the only way of saving it now is to reach some kind of a deal on all those “hopeless” provisions. Otherwise, it’s going to be stalemate city.

For months there have been two hidden priorities for September. First, getting the SCHIP bill to the White House so it can be vetoed and over-ridden in a vote that includes lots of Republicans. And second making sure that the [pending 10%] physician fee cuts are restored this year instead of being extended like they were last fall due to the election. Nobody wants the AMA attacking Congress just weeks before the first Democratic primaries in February. This year it has to be done by mid-December at the latest.

The road map for dropping the House MA provisions in SCHIP has to deal with this now, not after the SCHIP compromise is voted on and sent to Bush. The only financing method that can raise enough to satisfy the docs is MA reform. Basically, the passage of the House bill gave House Democrats the leverage they needed to insist on a private behind-the-scenes deal before SCHIP can pass.

What’s going to be in the deal? That depends on how much the Senate Finance Committee thinks it has to give the House Dems to make them jump. Almost all of the non-SCHIP stuff in the House came from the House Commerce Committee, not Ways & Means and not necessarily the majority. With the huge attraction of child health removed, the Senate can probably pick and choose what it wants from the House bill, just enough to reach the magic number of bi-partisan votes in the Senate. First to cut will be MA private fee-for-service, but there are dozens of smaller changes that affect various provider groups, not just insurers.

What’s in this for the GOP? Nothing good. If they try to block SCHIP, Republicans get hammered by voters just before an election in which they are already expected to lose seats and perhaps lost their majority for decades. The best idea may be to let Bush fight his own veto battle on SCHIP without even involving Republicans. That means letting the House MA reforms go through, and a large faction of the GOP will say it’s better to protect MA than pass SCHIP.

Medicare Advantage lobbyists this week said with bravado they think they can win the battle with the AMA over whether to use MA reform to pay for restoring Medicare physician fee cuts. I doubt it. First, most of the private insurers in the U.S. are not even that interested in Medicare Advantage – it’s heavily concentrated in United, a couple Blues plans, and the large regional HMOs like Kaiser. Intense lobbying at the state level by medical societies could really hit home this year and easily trump anything AHIP can muster in an underfunded campaign that is not winning much public credibility – or votes. The health insurance industry is also split. Carriers are really much less worried about MA reform than Michael Moore’s popularity with mainstream voters, and finding ways to work with Democrats.

Thursday, August 2, 2007

Why Is President Bush So Willing to Veto Spending Bills All of a Sudden?

This President didn’t veto a single spending bill during the first six years of his presidency when the Republicans were in control. You might recall John McCain’s characterization of the Republican Congress when he said they spent money “like drunken sailors” all with the concurrence of President Bush.

Now, with the Democrats in control, the President seems more than ready to confront Congressional spending—he's threatened to veto about every Democratic domestic spending bill now under consideration in the Congress.

He's even threatened a veto of the bipartisan Senate SCHIP reauthorization bill when lots of Republicans are onside with the Democrats pleading with him to approve the S-CHIP deal and when there is no chance the Congress will seriously consider his alternatives like his health care income tax proposal.

What’s going on here?

A little history might be helpful.

You might remember the first news conference Bill Clinton had in the wake of the 1994 election in which the Republicans took control of the Congress. One statement Clinton made in response to questions about the big Republican victory and their bold plans to change the national agenda has lived on, “I am not irrelevant.”

President Bush now faces many of the same questions in the wake of last fall’s Democratic victory, particularly as Republican support for his Iraq policy is melting on Capitol Hill.

The National Review, a bastion of conservatism founded by William F. Buckley, Jr., and filled with articles written by leading conservatives, represents Bush’s political “base” if anything does.

That’s why a recent article in the opinion section of the Washington Post by Byron York, National Review’s White House correspondent and the author of “The Vast Left Wing Conspiracy,” is all the more notable.

The title of the article tells all, “Base to Bush: It’s Over.”

This from the article:

“So now the president has 18 months left in office, and they won’t be quiet ones. Absent the committed backing of his party, he will be forced to exercise power based not on his political clout but rather on the authority the Constitution gives the office of the president: He is commander in chief. He can veto bills. He can issue pardons. And that’s about it.”

I’d say that about sums it up for why Bush is now so veto happy—even when it’s Republicans he’s publicly arguing with.

The statement he’s making, particularly to Republicans in Congress, like Chuck Grassley and Orin Hatch who did the SCHIP deal with Democrats and all of those House members who voted with the Democrats on the Labor-HHS-Education bill is, “Wait a minute with all of your deals with this Democratic Congress, I’m still relevant!”

This is where it gets interesting.

Is Bush about to do what Clinton did to restore his presidency—willingly face off with a Congress recently taken over by the other party in a winner-take-all budget battle that included a government-shutdown?

With his support in the polls, from Republicans in Congress, and from his base in the country, at such low levels this President is standing almost alone on everything from Iraq to SCHIP and looks more intent than ever on pursuing a course he strongly believes in and has the Constitutional prerogatives to carry out.

Earlier Post: SCHIP Reauthorization and High Stakes Politics

SCHIP Reauthorization and High Stakes Politics

Everyone agrees that the State Children’s Health Insurance Program (SCHIP) needs to be reauthorized.

But Washington couldn’t have made such a simple idea any more complicated or controversial.

So far:
  • The Senate has come to a bipartisan agreement, supported by lots of Republicans, that would increase spending by $35 billion, add another three million kids to the six million already covered, pay for it with a 61 cent tobacco tax, and streamline the program more along its original lines.
  • The House is struggling to approve a much larger $60 billion expansion and pay for it with both a tobacco tax and cuts to private Medicare plans that would equalize them with traditional Medicare over a three year phase-in beginning in 2009. The House bill also deals with other health care issues like the upcoming physician fee cuts.
  • President Bush has said both proposals go too far toward creating government-run health care and he has promised to veto both.
  • Republicans are working with Democrats in the Senate in an attempt to have the votes to override a presidential veto. They might have the votes in the Senate and are less likely to have the needed two-thirds in the House.

The Congress is set to leave town at the end of this week and not come back until after Labor Day.

Where is this going to come out?

First, SCHIP will be reauthorized. Most likely, Bush and the Congress, led by Republican Senators who include Grassley and Hatch, will work out a deal by the end of September that will likely expand the current SCHIP program in the $15 - $20 billion range and pay for it with a smaller tobacco tax—and not Medicare Advantage cuts.

The House bill is just an exercise that goes way beyond anything that is possible in the Senate.

Failing that, the program will be continued at present levels using a “continuing resolution.” No one will let it die when it sunsets on September 30th. In this scenario, SCHIP would get punted to the year-end omnibus reconciliation that the Democrats will have far more control over.

The Congress is ready to cut private Medicare payments. Congress needs the Medicare Advantage money to forestall the upcoming 10% physician fee cuts.

The House SCHIP bill is valuable in that it shows the health plan industry the worst case scenario for private Medicare cuts—no sooner than 2009 and a three-year phase-out of payments above traditional Medicare.

But we won’t get to the physician fee cuts and private Medicare payments until the year-end omnibus budget bill where the Democratic committee chairmen will have total control of the Congressional budget process.

The most likely outcome is that the Senate will drive a less dramatic cut to Medicare Advantage than the House wants—looks to me like a four to five year phase-out with the possibility that Private Fee For Service rates in urban areas would be frozen—all starting no sooner than 2009.

To make things even more interesting, Bush has also threatened to veto about all the Democratic spending bills.

Just how far President Bush is willing to go in this budget showdown with the Congress will become evident in how the SCHIP negotiations between the White House and Republican Senators turn out. If they can’t get a SCHIP deal done, we will be headed toward a big budget showdown between the President and the Congress. That is something that Republicans are really worried about—they have to face reelection even if Bush doesn’t.

If cooler heads prevail we will have lots of compromises that will include the necessary Medicare Advantage cuts to pay for other provider needs—particularly the docs.

If cooler heads don’t prevail, we will have one hell of a budget mess.

SCHIP will tell us if Bush is in the mood to deal or not.

Earlier Post on the Senate SCHIP compromise: Bush Reaffirms Veto Threat Over SCHIP Despite Strong Republican Support for Bipartisan Compromise—What’s Really Going On Here?

Friday, July 20, 2007

Bush Reaffirms Veto Threat Over SCHIP Despite Strong Republican Support for Bipartisan Compromise—What’s Really Going On Here?

The most exasperated person in Washington has to be Senator Chuck Grassley (R-IA). The Ranking Republican on the Senate Finance Committee has worked out a bipartisan compromise with his good friend Senator Max Baucus (D-MT) to continue the State Children’s Health Insurance Program (SCHIP) past its September 30 expiration date.

The plan currently covers 6.6 million low income kids and would cover another 3.3 million under the plan that would increase spending by $35 billion over five years and pay for it with a new 61 cent per pack tobacco tax.

But President Bush says he will veto the deal because he worries that it is a dangerous expansion of government-run health care.

Not only is Grassley exasperated over that comment but so is about everyone else in Washington. This is a truly bipartisan deal with the Senate Finance Committee overwhelmingly approving it with plenty of Republican support.

What makes this so puzzling is that Bush’s stance is out of synch with the facts and his own health care track record:
  1. The President has called for expansion of health insurance since he took office through assistance for the poor to buy health insurance in the private market. SCHIP is largely provided through private insurance companies—public funding of private coverage albeit without a choice of different plans by the consumer. Private insurance companies support the deal because setting up Part D-like multiple choices for kids is not practical.
  2. A centerpiece of the Bush administration is the Medicare Part D drug plan for seniors—government financed and provided through private insurers.
  3. The Bush administration has approved one state waiver after another allowing states to expand the program beyond its original intent. The Bush administration just approved such a big expansion in Wisconsin. The Senate deal would go a long way toward eliminating the "over expansion" Bush has been complaining about.
The Part D drug benefit was the biggest expansion of a government health care program since Medicare was passed in 1965—and Bush sees it as a big victory. SCHIP is maybe a tenth the size of Part D and largely delivered through private insurers who have to competitively bid the contract and Bush says it’s opening “an avenue for people to switch from private insurance to government.” Never mind that there is no "switch" involved here because they are almost always uninsured to begin with.

The President also says he wants to have a discussion over his proposal to change the way health benefits are taxed with an eye toward giving consumers more individual control over their health care. OK. But that general idea has been around for 15 years and he never made that proposal in the six years he had a Republican Congress who would have been a great deal more supportive of the idea then the current Democratic Congress.

What’s really going on here?

My sense is that this President has decided he needs a whopper of a political fight with the Democrats to recharge his flagging presidency and he’s decided to take them on over his view that Democrats would like to “socialize health care" in the U.S. Apparently, his political advisers are telling him the “socialized health care” line is still a good one with mainstream voters.

Never mind the fact that many Republicans—including Grassley and Orin Hatch (R-UT) who are key authors of the compromise and plenty of other Senate Republicans--are onside.

In an earlier post I said that it looks to me like we have a desperate President with nothing to lose as he tries to get his administration back on track in its last year.

I also made the point that it looks to me like Bush is willing to finally veto lots of spending bills—he didn’t veto any Republican spending bills during his first six years.

Is this just the opening round in a bigger fight from a President willing to have a government shutdown battle with the Congress to reassert his presidency?

In 1995, the roles were reversed. Democrat Clinton was looking to reassert his flagging presidency just as just as Republican Gingrich was looking to make a new Congressional majority dominant. Is Bush taking a page from Bill Clinton's game book?

Is Bush trying to make himself "relevant" again?
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