| News from CQ Roll Call. ANALYSIS from Thomson Reuters. |
APRIL 8, 2011 |
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Significant changes to Medicare and Medicaid in Ryan proposal The U.S. House of Representatives is poised next week to pass a fiscal 2012 budget resolution that would dramatically reshape the Medicare and Medicaid entitlement programs. The resolution also would repeal the expanded coverage provisions in the Democrats’ 2010 healthcare law, but not the cuts to providers that were part of compromises at the center of the overhaul. Approved this week by the House Budget Committee, the resolution is likely to pass the House but is not expected to be accepted by the Democratic Senate. States and beneficiaries would probably end up paying more under the budget resolution. The outlines of the resolution were unveiled April 5, by Budget Committee Chairman Paul D. Ryan, Republican of Wisconsin. When compared to President Barack Obama’s budget proposal, the Budget Committee said Ryan’s plan would spend USD2.53 trillion less on healthcare from 2012 to 2022. That includes USD1.4 trillion that Obama’s plan assumes to implement the healthcare law, USD735 billion less for Medicaid and USD389 billion less for Medicare through 2022, according to Budget Committee estimates. “We believe that we ought to have a safety net to catch people from slipping through the cracks, to help people when they’re down on their luck and to help people who cannot help themselves,” Ryan said. “The problem is our social safety net is fraying at the seams.” Ryan said that lawmakers have a “moral imperative” to reduce the spending growth in programs such as Medicare and Medicaid, so that the costs are not a burden on future generations. Medicare limits The proposal recommends changing Medicare’s fee-for-service program into one in which seniors and people with disabilities would be given a fixed subsidy each year. Patients would use their annual allotment to buy private health insurance in a new Medicare exchange market. Ryan said that wealthier enrollees would have to pay more than others under his so-called “premium support” model, and that low-income seniors would get additional assistance. People who currently are 55 or older would not be affected. An analysis by the Congressional Budget Office found that “most elderly people would pay more for their healthcare than they would pay under the current Medicare system.” The CBO also noted that Ryan’s proposal would raise the age of eligibility for Medicare starting in 2022. According to the CBO, Ryan’s plan would increase the eligibility age by two months per year until it reached 67 in 2033. The CBO analysis said that people in the lowest 92 percent of the annual income distribution of the Medicare population would initially get a subsidy that would be roughly equal to the value of the benefit they would normally receive under traditional Medicare. However, people in the wealthiest two percent of the Medicare-eligible population would only get 30 percent of that amount. Although Medicare enrollees would pay higher costs under the proposed system, the federal government’s share of Medicare spending would be the same in 2022 under Ryan’s plan as it would under current law. The nonpartisan CBO analysis said that out-of-pocket costs for Medicare beneficiaries would more than double in 2022 when compared with the current system. The CBO analysis said that seniors and people with disabilities would pay a higher percentage of their medical costs under the House Republican plan for two basic reasons. First, private plans are more expensive than the traditional fee-for-service Medicare program. Secondly, the GOP budget shifts more of the costs over time from the government to beneficiaries. “A private health insurance plan covering the standardized benefits would, CBO estimates, be more expensive currently than traditional Medicare,” said the CBO explanation. “Both administrative costs (including profits) and payment rates to providers are higher for private plans than for Medicare.” The CBO said that those higher costs in private plans “would be offset partly but not fully” by some lower spending by patients in plans because insurers have tighter oversight of patients’ medical utilization of services than traditional Medicare, and because plans sometimes prevent seniors from buying Medicare supplemental coverage. If seniors don’t have this “Medigap” coverage, they might be less likely to get some medical services. The GOP proposal also would increase spending each year under Medicare at a lower inflation rate than under the current system, so that over time, the federal government’s share of the overall expenses would decline. The CBO said that by 2030, the government would pay about 32 percent of costs under Ryan’s proposal, compared with 35 percent of costs under current law — at the same time that the costs for seniors and people with disabilities would nearly triple. The average costs for Medicare enrollees would rise from USD5,538 in 2022 under current law projections to USD12,513 that year under Ryan’s plan, said Democrats on the House Energy and Commerce Committee. “All of that extra spending by seniors and people with disabilities would go to private plans,” said House Energy and Commerce top Democrat Henry A. Waxman of California. “These vouchers won’t cover what Medicare covers,” Waxman said in an interview. Medicaid limits Ryan also proposed converting Medicaid, the federal-state partnership for the poor, into a block grant program. Medicaid serves a range of patients, from children to nursing home residents, who have spent down their assets to qualify for the program. States must offer core benefits to specified populations to participate in Medicaid. In many states, officials also have chosen to go beyond those minimal requirements to offer more generous coverage to a broader population, and governors currently have the discretion to change those optional benefits. Under Ryan’s plan, governors also could change the mandatory core benefits for groups of people that they are now required to cover. “Federal payments for Medicaid under the proposal would be substantially smaller than currently projected amounts,” said the CBO analysis. “States would have additional flexibility to design and manage their Medicaid programs, and they might achieve greater efficiencies in the delivery of care than under current law. Even with additional flexibility, however, the large projected reduction in payments would probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law.” Medical community critical Medical providers expressed concern about the Republican proposal. Many were critical of the idea that the GOP plan would unravel the compromise that was put in current law through the healthcare overhaul. Some healthcare providers had accepted spending growth reductions in exchange for the promise of additional revenue, when more Americans gained coverage and used more medical services. Ryan’s document said that: “Any current-law Medicare savings must go to saving Medicare, not financing the creation of new open-ended health-care entitlements.” Trade association representatives for hospitals and other providers objected. “Today’s budget proposal by the House will severely impact access to care for our most vulnerable patients,” said Rich Umbdenstock, the CEO of the American Hospital Association. “While we recognize the serious fiscal challenges we face as a nation, this budget is not the right prescription for the health of America.” Mark Parkinson, the CEO of the American Health Care Association and National Center for Assisted Living, said that the trade association “understands the importance of addressing our nation’s growing debt and deficit and appreciates the challenges lawmakers face in reducing both. Still, our first responsibility is to ensure that America’s seniors who rely on Medicaid can continue to receive the long-term care they need.” Cancer patient advocates said that if Ryan’s plan were enacted, cancer patients could find it more difficult and expensive to get treatments that could save their lives. “The budget’s proposal to finance Medicaid through block grants could lead to new restrictions in eligibility, enrollment and benefits that could deny cancer patients the care they need,” said Christopher W. Hansen, president of the American Cancer Society’s Cancer Action Network. “Turning Medicare, which has provided affordable, adequate healthcare to seniors for nearly 50 years, into an ill-defined voucher program with limited benefits could have devastating consequences for cancer patients. With more than half of newly diagnosed cancer patients over the age of 65, seniors would be forced to make tough choices about what care they receive and what they forego.” Patient advocates were particularly concerned that Ryan’s proposed annual subsidy for Medicare wouldn’t keep pace with patients’ needs. “There is no guarantee that the subsidy or voucher would match the rate at which healthcare costs increase,” said Medicare Rights Center President Joe Baker. “This means that in order to buy adequate coverage, people with Medicare and their families will need to pay more out of pocket. The budget does nothing to address the root of high Medicare costs; rising costs in the entire healthcare sector. It wrongly puts the burden of these growing costs square on the backs of Medicare consumers alone.” The Ryan budget also proposed to stave off scheduled Medicare payment cuts for physicians for the next decade. The plan proposed capping medical malpractice awards, but that would produce only a small fraction of the funds needed to pay for preventing the Medicare cuts to physicians. Partisan reaction from lawmakers Democrats sounded the loudest alarms about Ryan’s proposal. “The Republicans are being dishonest about what they’re up to with this reckless budget,” said House Ways and Means ranking Democrat Sander M. Levin of Michigan. They are aiming to destroy Medicare for future generations, not save it. Future seniors would be given a voucher and then told they’re on their own. Under this Republican plan, if you develop a major medical problem and your voucher runs out, so be it.” The top Democrat on the Ways and Means Health Subcommittee, Pete Stark of California, said House Republicans “don’t believe that senior citizens and people with disabilities have a right to guaranteed health benefits. Instead, they will turn the health of seniors and people with disabilities over to private insurers. Say goodbye to secure healthcare when you need it most. That’s what this budget means to anyone in America who hopes to grow old.” Some Senate Republicans, who have praised the House proposal, such as Senate Budget top Republican Jeff Sessions of Alabama and Tom Coburn of Oklahoma, applauded Ryan for having the political courage to propose a budget that is unlikely to take effect anytime soon and was expected to be portrayed as harmful to seniors, a powerful political constituency. “Paul Ryan has had the courage to do what very few politicians have done,” Coburn said. “He has told the American people the truth about our impending debt crisis and put forward solutions to get us out of this mess. Anyone who attacks his plan without offering one of their own has no business serving in elected office. Members of Congress were elected to make hard choices, not play political games in order to advance their own careers.” Ryan seemed to acknowledge that the healthcare provisions in particular have little chance of becoming law. He said that he was more specific about his Medicare and Medicaid proposals than on Social Security because it’s already clear that Republicans and Democrats do not share the same views on healthcare issues, while he said there is still hope for a bipartisan compromise on Social Security.
Seniors’ views sought on joining ACO Medicare plan By Jane Norman, CQ HealthBeat Associate Editor April 1, 2011 The Obama administration is selling a plan to coordinate Medicare services, and the program’s success now rests on whether skeptical seniors will choose to participate. Experts say education will be pivotal to keep beneficiaries from taking any complaints to Congress, where lawmakers have proved highly sensitive to the protests of the powerful elder lobby. Officials with the Centers for Medicare and Medicaid Services (CMS) announced proposed rules for Accountable Care Organizations, known as ACOs, that the healthcare law created. The organizations are intended to get groups of doctors, hospitals and health systems to better coordinate care for Medicare patients. The organizations will create incentives to reward providers if they lower healthcare costs and meet quality-of-care standards. The organizations, by design, will do away with unnecessary tests and avoid the need for multiple medical histories for each doctor or specialist. Federal officials expect 75 to 150 of the organizations to form over the next three years, with about 1.5 million to 4 million of the nation’s 46 million Medicare patients to participate. Savings are projected to reach USD960 million in the first three years. The organizations are entirely voluntary — for patients and for providers. Medicare officials insist that the organizations will not limit healthcare services by using such managed care techniques as directing seniors to use only member providers. “An ACO will not limit patient choice,” said CMS Administrator Donald M. Berwick. But polls show that seniors already are more skeptical of the health law than most Americans, in part because they’re worried about the impact of Medicare payment cuts on access to care. Seniors also hear growing talk in Congress about curbing entitlements. All of this may influence their willingness to take part in a program that is new and aims to contain costs. “My guess is some of these things will start to merge in seniors’ minds and they will feel they are under attack,” said Maria Freese, vice president for government relations at the National Committee to Preserve Social Security and Medicare. Certainly, there is a history of seniors rebelling against changes in Medicare. A law enacting catastrophic care was repealed in 1989, after seniors protested a tax that it levied. And the 2006 prescription drug benefit under Medicare, while it survived, faced initial rough going amid confusion about choices offered and frustration with its complexity. Lawmakers will be monitoring developments. Senator Orrin G. Hatch of Utah, the top Finance Committee Republican, said the administration has to give lawmakers time to study a proposal that will fundamentally restructure the Medicare system. “Any attempt to short circuit this process would be detrimental to our nation’s doctors and seniors,” who need to know the impact, said Hatch. But Finance Committee Chairman Max Baucus, Democrat of Montana, predicted “top-notch patient care” as well as cost savings. For it to work, seniors will have to have confidence they will continue to have a choice of providers, said Robert Blendon, professor of health policy and political analysis at the Harvard School of Public Health. “If this gets to be restrictive for seniors, there will be a substantial backlash,” he said. “If it looks like it’s improving service and coordination, it’s something that would be seen as very positive. People would go out of the system less. But they still would know they have the option.” The law does not require seniors be informed that they might be assigned to an ACO. But the proposed rule notes success will be undermined if seniors lack sufficient information. So the regulations call for the development of a communications plan, including educational materials and outreach. Seniors will be told they may be assigned to an ACO, and that if they agree, their health information may be shared among group providers. During office visits, patients would get forms detailing how they could opt out of the ACO. And the Medicare handbook will be updated. One problem, though, is that Medicare recipients will not know until the end of the year whether their current doctor has become affiliated with an ACO. AARP, the senior lobbying group, already has expressed misgivings about this issue. The proposed solution is to post notices in provider offices and distribute handouts to patients informing them when providers join or drop out of the groups. Stuart Guterman, a vice president at the Commonwealth Fund, said the participation of seniors will be critical to the program’s success. The emphasis must be on what seniors will gain, he said. “When you leave one building, a doctor’s office or a hospital, the next thing that happens to you is planned and is aimed at making you better,” he said. “That’s a message that has to be gotten across.” Blendon said seniors will complain loudly to Congress if ACOs prove restrictive despite the promises of providing choice. If beneficiaries can’t see providers they’ve seen before, “I think members of Congress and the administration are going to hear from seniors,” he said.
FDA sets calorie counts for restaurants, vending machines New menu regulations proposed by the Food and Drug Administration last week will put calorie counts in the faces of American diners as they’re deciding what to put in their mouths. The FDA released two rules — one affecting restaurant chains of 20 or more locations and another affecting vending machines — that will require food businesses to tell people the calorie content of foods. Restaurants also would have to post information telling consumers that “a 2,000 calorie diet is used as the basis for general nutrition advice; however, individual calorie needs may vary.” The rules are required under the 2010 healthcare law. The FDA will collect comments on the menu labeling rule for restaurants until June 6. People who want to comment on the proposal to post signs about calorie counts for food in vending machines will have until July 5. “Americans now consume about one-third of their total calories on foods prepared outside the home,” said FDA Commissioner Margaret A. Hamburg. “While consumers can find calorie and other nutrition information on most packaged foods, it’s not generally available in restaurants or similar retail establishments. This proposal is aimed at giving consumers consistent and easy-to-understand nutrition information.” The menu labeling rules apply not only to restaurants but also to some grocery and convenience stores. The information also would have to be posted on menu boards for drive-throughs. But the agency wants to exempt movie theaters, airlines, bowling alleys and other businesses whose primary purpose is not to sell food. Trade associations that have been eager to see the rules say they will need some time to study them. The National Restaurant Association and International Franchise Association (IFA) had supported the idea of creating a uniform national standard because their members did not want to have to comply with a patchwork of different standards in various cities and states. “From Portland, Oregon, to Portland, Maine, the new standard will help chain restaurants provide the same type of nutrition information to consumers in any part of the country,” said Dawn Sweeney, president and CEO of the National Restaurant Association. “The publication of the proposed regulations in the Federal Register today is the next step forward in providing the industry with consistent, national requirements on how to implement the new uniform nutrition information standard.” IFA officials noted that the FDA is proposing that the new rules take effect six months after they are finalized. “We would prefer one year,” said Jason Straczewski, who is monitoring the rules for the IFA. One year would give chain restaurant owners more time to understand the requirements and put them in place. Some have recently spent money to update their menus and menu boards in order to adhere to requirements imposed by local or state governments. Democratic lawmakers who supported the provision in the law praised the regulation. “We passed the menu labeling law to help Americans make healthier choices when they dine out,” said Senator Thomas R. Carper, Democrat of Delaware. “It’s not a cure-all for America’s obesity problem by any means. Instead, it’s another tool Americans can use to make better choices for themselves and their families.” The FDA plans to finalize the rules this year.
CDC reports lowest teen pregnancy rate in 70 years The U.S. teen pregnancy rate fell in 2009 to its lowest rate ever recorded, though federal health officials cautioned Tuesday that in comparison to other developed nations, the United States still has too many teenagers giving birth. Major racial and ethnic disparities remain as well, with black and Hispanic teens two to three times more likely than white teens to have babies, researchers said. Teen pregnancy is a major issue in healthcare, as babies born to teens are more likely to be low birth weight or premature and require lengthy and costly care. The Centers for Disease Control and Prevention reported that in 2009, the teen birth rate was 39.1 births among 1,000 girls and young women ages 15 to 19. That meant 410,000 teens in the United States gave birth that year. It was the lowest rate in the 70 years the federal government has been collecting data on births. That is a 37 percent decrease in teen births compared to 1991 and part of an overall trend away from early or unprotected sexual activity. Among the sexually active, the percentage of those who said they didn’t use contraception the last time they had intercourse also decreased, to 12 percent in 2009. Ursula Bauer, director of the National Center for Chronic Disease Prevention and Health Promotion, said in a conference call with reporters that while great progress has been made in reducing teen births, “we have much more work to do in order to bring those rates in line with most other developed countries.” Teen moms are more likely to drop out of school and to fail to reach their full earning potential, she said. Wanda Barfield, director of the Division of Reproductive Health, National Center for Chronic Disease Prevention and Health Promotion, said both boys and girls were not receiving enough sex education and abstinence education. Only 50 percent of teen high school students received both types of education, she said. The CDC report said that education of both types has been shown to be successful in delaying sexual activity or increasing contraceptive use. Conversations with parents about sex also are considered important in preventing pregnancy. “What we are trying to achieve here is to delay the onset of sexual activity and for those teens who become sexually active, make sure they have the information about contraception they need to avoid pregnancy,” Bauer said.
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