Weekly Update on Federal Reform

Senate Health Committee, 2 House panels pass reform bills
Following Wednesday’s party-line vote approving health care legislation out of the Senate Health Committee, today both the House Committee on Education and Labor and the House Ways and Means approved a reform bill (Source: “House Panels Approve Health Plans,” New York Times, July 18, 2009).

In both House votes, three Democrats crossed party lines and voted against the measures. The votes mean three of five Congressional committees that are considering reform legislation have now passed out bills, all without a single Republican vote.

“There’s a value in achieving bipartisanship,” said Sen. Chris Dodd, the Connecticut Democrat who is chairing the Senate Health, Education, Labor and Pensions Committee in Sen. Ted Kennedy’s absence. “but I will not sacrifice a good bill for that. The people we are working for are not our colleagues, but the American public.”

Senate majority leader, Harry Reid of Nevada, has said he hopes to have a health care bill on the floor by July 27. However, the goal seems unlikely to be reached as the Senate Finance Committee continues to negotiate for a more bi-partisan bill out of its committee.

CBO: Reform bills won’t ‘bend the curve’
Testifying at a Senate hearing yesterday, Congressional Budget Office Director Douglas Elmendorf said that proposed health reform legislation will not slow the rate of growth for federal health care spending (Source: “How expensive is proposed healthcare legislation?” Christian Science Monitor, July 17, 2009).

“In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount,” Elmendorf told the Senate Budget Committee during his testimony, which was based on preliminary analysis of the House Tri-Committee bill and the Senate Health Committee bill.

According to CBO’s recent budget update, if current law is not changed, 56 percent of the cost growth in Medicare and Medicaid over the next 25 years will be attributable to “excess cost growth.”

That is, more than half of rising health costs are projected to be the result of an increase in medical spending per person, over and above normal inflation. This, in turn, is mainly the result of new medical technology, drugs, and other health-related innovations.

“Excess cost growth is the primary factor driving the growth of federal spending on Medicare and Medicaid, even over the intermediate term,” concludes CBO.

With CBO scoring playing such a large role in the debate over reform legislation, the nonpartisan Partnership to Fight Chronic Disease has issued a white paper, “Health-Care Cost Projections for Diabetes and other Chronic Diseases:The Current Context and Potential Enhancements" (pdf, 16 pages), that contends that the CBO’s practice of estimates costs out over 10 years may not provide an accurate picture of health care costs, in light of the long-term costs of treatment for diabetes and other chronic diseases.

Also this week, the conservative Heritage Foundation released its own analysis, titled “Understanding CBO Health Cost Estimates.”

Analysis: Health reform likely will require state, federal law changes
A new analysis posted on the Web site for the journal Health Affairs examines the intricate relationship between potential federal health reform that includes a national health insurance purchasing exchange or a public plan and the necessary changes that will be required to both state and federal law (Source: “Health Care Reform Requires Law Reform,” Health Affairs Web Exclusive, July 16, 2009).

Tim Jost, a professor at the Washington and Lee School of Law, contends that, “If Congress does create a purchasing exchange or a public plan, it should consider establishing federal coverage and underwriting rules that would preempt existing state standards. The new federal standards would apply to all health plans, public and private, within the exchange, and also to all insurers that compete with the exchange,” according to a press release announcing the article.

The paper examines the ways in which federal and state health care regulations interact with and limit each other. It also examines the effects of both federal and state laws on private actors.

Jost also sets forth the legal reforms that may be necessary if Congress enacts comprehensive health reform, if the states end up taking the lead on reform, or if only limited health reform occurs.

Report urges long-term care inclusion in reform debate
A policy brief  by Georgetown University researchers offers long-term-care policy options for federal reform (Source: “New Report Offers Policy Recommendations for Including Long-Term Care Services in Health Care Reform,” SCAN Foundation press release, July 16, 2009).

Funded by the SCAN Foundation, "Long-Term Care in Health Care Reform: Policy Options to Improve Both,” (pdf, 33 pages) offers four policy options:

• Expand Medicaid Support for Home and Community‐Based Services
• Improve Coordination of Medical and Long‐Term Care for Medicare‐Medicaid “Dual Eligibles”
• Improve Coordination of Medical and Long‐Term Care for Medicare Enrollees with Chronic Conditions
• Establish Public Insurance Protection for Long‐Term Care for the Broad Population