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How The Budget Deal Affects The Affordable Care Act

So how does this mammoth budget-cutting deal, with its congressional “supercommittee” affect health reform?

Good question, because lots of people in Washington are asking it too.

More specific answers will become clearer in the next few weeks, but here’s a first version of the road map to both the policy and the politics.

First, understand there are two different processes – and each, separately, aims at cutting more than $1 trillion over the next decade.

The one that you’ve probably heard most about is the “supercommittee” of 12 members of Congress. They are supposed to identify savings by Thanksgiving. Entitlements – Medicare, Medicaid, Social Security and aspects of the Affordable Care Act – are part of their turf. So are taxes and revenue – at least in theory. It’s not so clear that the Republicans see it that way given the public statements of Congressional leaders.

If they agree on some kind of grand deal by Thanksgiving, Congress has to take it or leave it by the end of December, eliminating the usual congressional dilly-dallying. (It looks like dilly-dallying to the casual observer or much of the public, but remember that all that arcane, tedious process IS policy in Congress. If you slow something down, make it go through hoops, amend it, hold it up, etc., it doesn’t become law. That may be good or, depending on your point of view, bad politics.)

If Congress takes any recommendations that the supercommittee agrees on, that’s the law. If the committee fails, or Congress rejects it, then the “trigger” gets pulled. The official name is “sequestration.” That’s a fancy name for automatic cuts – 2 percent across-the-board cuts in Medicare, for instance, affecting all health care providers, doctors, hospitals, etc. It won’t affect beneficiaries – at least not directly.

Medicaid is not subject to the trigger. Neither, according to the preliminary interpretations I’ve received from analysts and congressional staff, are the big, key subsidies in the health care reform law – the Medicaid expansion and the subsidies that will help low-income and middle-income people afford health care in the new state exchanges.

Other parts of the health reform law are, however, subject to automatic cuts. Among them: Cost-sharing subsidies for low-income people. This isn’t the help paying the premium; this is the help with the co-pays when people do get care. But the payments are made to health plans, not directly to beneficiaries so it won’t have the direct impact of discouraging care. It may affect how health plans make decisions about what markets to participate in. Gary Claxton and Larry Levitt at Kaiser Family Foundation explain here.

Also, the supercommittee could have a partial deal – meaning there’s still a trigger, but a smaller one. Maybe they won’t reach agreement on $1.2 trillion to $1.5 trillion in savings, which would avoid the trigger. But maybe they could agree on, say, $500 billion. That means a trigger wouldn’t have to go as deep because some of the savings would already be identified.

To recap – before we go on to the second stage of this process: The “super-committee” can do whatever it wants to health care, Medicare, Medicaid, Social Security, etc. – if it can agree, if it can get the rest of Congress to agree and if the president doesn’t veto it.

Will the Democratic Senate and the Obama White House agree to cuts that eviscerate health reform? Not likely. In fact, the Democrats “won” on very few aspects of the budget/debt deal. Walling off Medicaid and key parts of the health coverage expansion were two of the “wins.” That’s a bright line worth paying attention to as this moves forward.

Does that mean other health-reform related spending will be untouched? Given how many moving parts there are to any spending deal, and the fact that defense and tax policy are also part of the mix, chances are it will be affected. But expect to see that bright line remain visible – maybe not quite as bright, but visible. (The CLASS Act, the voluntary long-term care program created under health reform, is a different story; it’s quite vulnerable.)

The second part is the annual appropriations process. The budget deal provides for cuts – real cuts in spending, not just slowing the rate of growth. Health programs (aspects of the health reform legislation touching on exchange creation, prevention, community clinics, etc., and just about everything else at the Department of Health and Human Services – the FDA, NIH, CDC, etc. – will be subject to these cuts. But this isn’t an across the board process, it’s a line-by-line, or at least category/agency-by-category/agency, process. And there is some horse trading.

It’s safe to say that the Republicans will try to cut discretionary portions of the new health law. That’s not a new political dynamic, it doesn’t arise out of the debt ceiling or the Wall Street woes. It’s what we’ve seen since last fall’s elections and the repeal/defund fights of the past few months. And House Budget Chairman Paul Ryan has publicly tried to insert health care into any potential deal. So expect to see more Republican push to cut, and continued Democratic push back. Will health spending emerge unscathed? It’s too soon to know but, given the amount of savings Congress needs to find –both in this budget deal and in the perennial quest to fund the “doc fix” payments – some cuts are clearly possible. Some of it may affect aspects of exchange establishment, regulation, prevention, public health, etc. But it’s hard to see the Democrats allowing cuts so deep that they basically constitute a side door to repeal.

One further twist – some Republicans are calling for a delay in health reform implementation to save money.”Delay” may sound better to an ambivalent public worried about spending than “repeal.” What’s delayed (if anything), how it’s delayed, how long it’s delayed, and what stopgaps are created in the meantime could have an impact on how many people get covered in 2014.

Assorted committees and government agencies are still examining the new budget law and how it will affect … everything. So the perspective I’ve outlined here – and I’m writing amid all the market turbulence – may change as the economic and political climates change. But the lines in the sand around the trigger – health reform, Medicaid and Social Security – tell us something about where the White House will come down.

By: Joanne Kenen, Association of Health Care Journalists, August 10, 2011

August 11, 2011 Posted by | Affordable Care Act, Budget, Congress, Conservatives, Debt Ceiling, Debt Crisis, Deficits, Democrats, Economy, GOP, Government, Health Care, Health Reform, Ideologues, Ideology, Individual Mandate, Insurance Companies, Journalists, Lawmakers, Medicaid, Medicare, Politics, Public Health, Republicans, Right Wing, Social Security, Tax Increases, Tax Loopholes, Taxes, Teaparty | , , , , , , , , , , , , , , , , , , | 1 Comment

Republican Paradox: The Party That Can’t Say Yes

For days, the White House has infuriated its Democratic allies in Congress by offering House Republicans more and more in exchange for a deal to raise the debt ceiling and prevent default. But it was never enough, and, on Friday evening, it became clear that it may never be enough. Speaker John Boehner again walked away from the “grand bargain” he had been negotiating with President Obama, leaving the country teetering on the brink of another economic collapse.

At the White House podium a few minutes later, the president radiated a righteous fury he rarely displays in public, finally placing the blame for this wholly unnecessary crisis squarely where it belongs: on Republicans who will do anything to upend his presidency and dismantle every social program they can find. “Can they say yes to anything?” he asked, noting the paradox of Republicans, who claim that financial responsibility and debt reduction are their biggest priorities, rejecting yet another deal that would have cut that debt by at least $3 trillion.

Mr. Obama, in fact, had already gone much too far in trying to make his deal palatable to House Republicans, offering to cut spending even further than the deficit plan proposed this week by the bipartisan “Gang of Six,” which includes some of the Senate’s most conservative members. The White House was willing to cut $1 trillion in domestic and defense spending and another $650 billion from Medicare, Medicaid and even Social Security.

Much of that savings would have come from raising the eligibility age for Medicare benefits and reducing the cost-of-living increases that elderly people depend on when receiving their health and pension benefits. It could have caused significant damage to some of the nation’s most vulnerable people.

The “bargain” would require that alongside these cuts, tax revenues would go up by $1.2 trillion, largely through a rewrite of the tax code to eliminate many deductions and loopholes. That’s substantially less in revenue than the $2 trillion in the “Gang of Six” plan. The problem is that while much of the cutting would start right away, most of the revenue increases would be put off, in part because a tax-code revision would take months, and in part to allow House Republicans to say they did not agree to any specific tax revenue increases.

Democratic lawmakers were rightly furious when they heard about these details this week, calling the plan wholly unbalanced. But, in the end, it was Mr. Boehner who torpedoed the talks. He said Friday evening that he and the president had come close to agreeing on $800 billion of the revenue increases (the equivalent of letting the upper-income Bush tax cuts expire as scheduled next year — not much of a heavy lift) but could not stomach another $400 billion the White House wanted to raise through ending tax loopholes and deductions.

So, on the eve of economic calamity, the Republicans killed an overly generous deal largely over a paltry $400 billion in deductions. Mr. Obama was willing to take considerable heat from his liberal critics over the deal, and the Republicans were not willing to do a thing to anger their Tea Party base. As the president forcefully said, there is no evidence that House Republicans are capable of making those tough decisions. If last-ditch talks beginning Saturday fail, they will have to take responsibility if the unimaginable — a government default — happens in 10 days and the checks stop going out.

By: The New York Times, Editorial, July 22, 2011

July 24, 2011 Posted by | Congress, Conservatives, Consumers, Debt Ceiling, Debt Crisis, Deficits, Democracy, Democrats, Economic Recovery, Economy, Federal Budget, GOP, Government, Government Shut Down, Ideologues, Ideology, Lawmakers, Medicare, Middle Class, Politics, President Obama, Public, Public Opinion, Republicans, Right Wing, Tax Credits, Tax Increases, Tax Loopholes, Taxes, Teaparty | , , , , , , , , , , , , , , , | Leave a comment

The Truth About Waivers: Protecting Coverage For Millions Of Americans

Today, you might have seen news stories about waivers from certain provisions of the Affordable Care Act. There has been no shortage of confusion and deliberate obfuscation on this issue and we want to ensure you have the facts.

Under the Affordable Care Act, we have implemented new rules that phase out, by 2014, health insurance companies’ ability to slap restrictive annual dollar limits on the amount they will pay for your care.  But between now and 2014, we also want to make sure workers are able to maintain their existing insurance, because on their own they would likely be shut out of the individual market or face unaffordable options. To do that, the Affordable Care Act allows the Department of Health and Human Services to issue temporary waivers from the annual limit provision of the law if it would disrupt access to existing insurance arrangements or adversely affect premiums, causing people to lose coverage. So far, we have granted 1,372 of these waivers to employers, health plans, and others in all 50 states, covering less than 2 percent of the insurance market and protecting coverage for more than 3.1 million Americans. We have been completely transparent about this process, announcing the waiver process in a regulation last summer, publishing clear guidance on the application process on our website, and posting a list of waivers we have granted on our website.

These temporary waivers will not be available beginning in 2014 when annual limits are banned and all Americans will have affordable coverage options. And millions of Americans – including many small business owners – will be able to shop for affordable coverage in new competitive marketplaces.

Some have raised questions about waivers that were recently granted to companies in California. So there’s no confusion, here are the facts:

  • A company called Flex Plan Services is a third-party administrator that provides benefit administration services for employers in a number of states, including: California, Washington, Alaska, and Georgia. One type of plan they administer is known as a health reimbursement arrangements (HRA or employer contributions to a tax free account).  Many of the company’s clients are hotels, restaurants and home health agencies, all of whom employ low-wage workers.
  • On March 23, Flex Plan Services submitted 92 waiver requests on behalf of 45 employer clients. On April 4, 2011, HHS approved the request.
  • HHS applied the same standard to the application from Flex Plan Services that it uses when reviewing any application for a temporary waiver. Waivers are only available if the plan certifies that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage.
  • In addition, enrollees must be informed that their plan offers coverage with a restricted annual limit.
  • No other provision of the Affordable Care Act is affected by these waivers: they only apply to the annual limit policy.

The Affordable Care Act puts an end to many of the worst insurance company practices including refusing to sell a policy to a family because someone had cancer or a child has asthma; cancelling coverage when a patient files claims because of an unintentional mistake in their paperwork; and slapping annual or lifetime limits on how much care you can receive. When these rules are fully in place in 2014, our country will be much better off and the cost of coverage will be within reach for the millions of Americans who now live day to day without coverage, worrying about an injury or an illness that could plunge them into bankruptcy. To get from today’s broken system to tomorrow’s patient-centered system takes time and patience through a reasonable transition period. But, together, we will get there.

By: Richard Sorian, Asst. Sec for Public Affairs, HHS, The White House Blog, May 17, 2011

May 19, 2011 Posted by | Affordable Care Act, Businesses, Consumers, Government, Health Care, Health Reform, Middle Class, Politics, Public, Public Health, Small Businesses, States, Under Insured, Uninsured | , , , , , , , , , | Leave a comment

Debunking The Right’s Health Waiver Conspiracy

Is House Minority Leader Nancy Pelosi helping companies in her district get around new health care rules? Conservatives seem to think so, but their evidence is spotty at best.

Last month, the Obama administration granted a reprieve to 204 businesses and policyholders from new health coverage rules under the Affordable Care Act, bringing the total number of waivers to more than 1370. Many of the waivers are for limited benefit or so called “mini-med” plans—controversial rock-bottom plans that provide a very limited amount of coverage (sometimes as little as $2,000 a year) to beneficiaries that are used heavily in low-wage industries like the restaurant business. New federal rules require such plans to offer a minimum of $750,000 of coverage annually, and the waivers exempt the mini-med plans from such rules on a case-by-case basis.

The Daily Caller reported on Tuesday that businesses in Pelosi’s district received nearly 20 percent of the waivers in April, pointing out that many of them went to high-end restaurants and hotels. Sarah Palin piled on in a subsequent interview with the Caller, calling the discovery “unflippingbelievable!” and “corrupt.”

Pelosi’s communications director, Nadeam Elshami, pushed back against the criticisms in an email to Mother Jones, denying that Pelosi’s district received any special treatment. Her office also denied that it was at all involved in the process of granting waivers for these businesses. “It is pathetic that there are those who would be cheering for Americans to lose their minimum health coverage or see their premiums increase for political purposes,” Elshami wrote Tuesday afternoon, emphasizing that health-care waivers “are reviewed and granted solely by the Administration in an open and transparent process.”

In fact, the recent waiver applications from businesses in Pelosi’s district were not even received by the minority leader’s office. Rather, they were submitted directly to the Obama administration through a third-party company, Flex Plan Services, which provides benefit administration to companies in the Bay Area, Washington state, and elsewhere in the country, according to a statement issued by Richard Solarian, an assistant HHS secretary. On March 23, Flex Plan Services submitted applications for annual limit waivers for their clients’ health plan, including 69 businesses in California, 20 in Washington state, two in Georgia, and one in Alaska, including restaurants, home health care providers, and other service-based companies. On April 4, the U.S. Department of Health and Human Services approved the waiver request for all of Flex Plan Services’ clients—not just the ones in Pelosi’s district.

Flex Plan Services never contacted Pelosi’s office about their waiver request, and her office did neither provided any information to the company about the waivers nor helped facilitate the request, according to her spokesperson.

In other words, the reason the waivers were clumped together was because Flex Plan Services—which is in charge of administrating all of these businesses’ health care benefits—had issued a waiver request for the entire group of businesses. Altogether, the Obama administration has granted 1372 waivers and has denied about 100 requests. The mini-med waivers are essentially a stop-gap measure designed to keep employers from dropping health care benefits all together. The White House explains that waivers are granted if conforming to the rules “would disrupt access to existing insurance arrangements or adversely affect premiums, causing people to lose coverage,” acknowledging that the low-benefits plans are sometimes the only option that some employers can offer. The Democrats’ rationale is that the other changes under federal health reform will eventually allow employers to receive better, more affordable coverage under the health insurance exchange, when it begins operating in 2014.

To be sure, it’s worth closely examining which businesses and policyholders have received waivers, as well as which ones have denied them, along with the Obama administration’s rationale for making such decisions. But, as the April waivers reveal, the very fact that reprieves have been granted to businesses residing in democratic districts doesn’t mean the process is unjust. And to assume that the rationale must be political or “corrupt” is to turn a real policy issue into a partisan bludgeon.

By: Suzy Khimm, Mother Jones, May 17, 2011

May 17, 2011 Posted by | Affordable Care Act, Businesses, Conservatives, Consumers, Democrats, GOP, Health Care, Health Care Costs, Health Reform, Ideology, Politics, President Obama, Public, Republicans, Right Wing | , , , , , , | Leave a comment

Paul Ryan’s Moral Barbarism

Karl Rove’s column the other day joined the many conservatives expressing their hurt and anger that President Obama would depict Paul Ryan’s budget as harming sick and vulnerable citizens:

Mr. Obama likes campaigning more than governing. And for this president, campaigning means knocking down straw men and delivering a steady stream of misleading attacks. It means depicting opponents as indecent, heartless people who take special delight in targeting seniors and autistic children.

In fact, Obama has never accused Ryan, or anybody, of having a “special delight” in targetting seniors and autistic children. But he has accused them of pursuing policies that would harm, among others, seniors and autistic children. That’s because it’s incontrovertably true. The Center on Budget and Policy Priorities delves into the details of Ryan’s plan to slash Medicaid by more than a third over the next decade, and in half over the next two decades:

  • Seniors:   An overwhelming majority of Medicare beneficiaries who live in nursing homes rely on Medicaid for their nursing home coverage.  Because the Ryan plan would require such deep cuts in federal Medicaid funding, it would inevitably result in less coverage for nursing home residents and shift more of the cost of nursing home care to elderly beneficiaries and their families.  A sharp reduction in the quality of nursing home care would be virtually inevitable, due to the large reduction that would occur in the resources made available to pay for such care.
  • People with disabilities:   These individuals constitute 15 percent of Medicaid beneficiaries but account for 42 percent of all Medicaid expenditures, mostly because of their extensive health and long-term care needs.  Capping federal Medicaid funding would place significant financial pressure on states to scale back eligibility and coverage for this high-cost population, many of whom would be unable to obtain coverage elsewhere because of their medical conditions.
  • Children:   Currently, state Medicaid programs must provide children with health care services and treatments they need for their healthy development through the Early Periodic Screening, Diagnostic and Treatment (EPSDT) aspect of Medicaid, which provides regular preventive care for children and all follow-up diagnostic and treatment services that children are found to need.  A block grant would likely permit states to drop EPSDT coverage, meaning that children, particularly those with special health care needs, would not be able to access some care that medical professionals find they need (because Medicaid would no longer cover certain health services and treatments for children, and their parents wouldn’t be able to afford to pay for that care on their own).
  • Working parents and pregnant women:   Many state Medicaid programs already have extremely restrictive eligibility criteria for parents.  In the typical state, working parents are ineligible for Medicaid if their income exceeds 64 percent of the poverty line (or $14,304 a year for a family of four), and unemployed parents are ineligible if their income exceeds 37 percent of the poverty line ($8,270 a year for a family of four).  Under a block grant, states could cut these already low eligibility levels even further, cap enrollment, and/or require low-income parents to pay more for health services.  States could do the same for low-income pregnant women who rely on Medicaid for their prenatal care, resulting in them forgoing services that are critical to ensuring a healthy pregnancy.

Now, Rove appears to be a pathological liar, or at least so deeply enmeshed in partisan spin it’s not clear that a distinction exists in his mind between objective truth and claims that are useful to his side. But many other conservatives have likewise expressed what has the ring of genuine outrage that Obama would accuse Ryan of snatching medical care away from people in nursing homes, very poor families, special needs children, and so on. I think it reflects, in part, an inability or lack of desire to think with any specificty about the concrete ramifications of imposing extremely deep cuts to Medicaid. Who do they think is on Medicaid? Prosperous, healthy people?

No, Medicaid is a bare-bones program throwing a lifeline to people who are in bad shape. Cutting Medicaid may be the politically easiest way for Ryan to clear budget room to preserve Bush-era revenue levels, as Medicaid patients have little political clout. But it is, well, deeply immoral. I’m actually surprised that conservatives not only can’t seem to imagine (or care about) the consequences of such policies, but they can’t even imagine that people like Obama would actually feel moral outrage at their plan. They can’t imagine a liberal objection as representing anything other than an attempt to score political points. It’s bizarre. I mean, of course Obama finds it morally objectionable to take away medical care to people in nursing homes and children with special needs. That’s why he’s a Democrat.

By: Jonathan Chait, The New Republic, May 3, 2011

May 3, 2011 Posted by | Conservatives, Democrats, GOP, Governors, Health Care, Health Care Costs, Health Reform, Medicaid, Politics, President Obama, Rep Paul Ryan, Republicans, Seniors, States | , , , , , , , , | Leave a comment

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