WASHINGTON WIRE
February 9, 2007
Issue 121
President's Budget Proposes Major Cuts to Health Care Programs
Leavitt Faces Tough Audience on Capitol Hill
Unions and Employers Join for Health Care Reform Campaign
Top Story
President's Budget Proposes Major Cuts to Health Care Programs
On Monday, February 5, 2007, the Bush Administration released its $2.9 trillion fiscal year (FY) 2008 budget request, calling for significant cuts to many domestic programs, including Medicare and Medicaid.
The proposals would cut $101 billion from entitlement spending over the next five years, with $76 billion of those savings coming from the Medicare program. The President's budget would make cuts to inpatient rehabilitation facility (IRF), skilled nursing facility (SNF), hospital, outpatient department, hospice, and home health reimbursements over the next five years. The budget also proposes increases in Medicare Part B and Part D premiums for higher-income beneficiaries.
Regarding the Medicaid program, the President's budget calls for nearly $25 billion in cuts over the next five years. Many of the cost-saving proposals could be accomplished through Administrative regulations and include a reduction in the federal matching rate for some administrative services, a reduction in the federal Medicaid reimbursement for Targeted Case Management services, and a narrowing of the Medicaid Rehabilitative Services option.
The President's budget also includes many of the health care reforms previewed in his recent State of the Union Address. Such proposals include the "Affordable Choices" grant programs, to assist states in covering the uninsured, and a new tax on employer-provided health benefits implemented in tandem with deductions for individuals and families who have purchased individual health insurance or are covered under a group plan through their employer.
Although some supporters praised the President's budget as fiscally responsible, critics have blasted the request as going too far in cutting domestic programs and view the budget's legislative proposals suggested to Congress as dead on arrival.
Health Care News
Leavitt Faces Tough Audience on Capitol Hill
Health and Human Services (HHS) Secretary, Michael Leavitt, appeared before the House Energy and Commerce, House Ways and Means, and the Senate Finance Committees this week to answer tough questions on the President's health care proposals in his FY 2008 budget.
Democrats sharply criticized the Administration's proposals for the State Children's Health Insurance Program (SCHIP), which would provide an additional $4.8 billion to the program. SCHIP is up for reauthorization this year and $4.8 billion is far less than the $60 billion increase advocated by some Democrats.
Secretary Leavitt stated that the Administration is also proposing to stop granting SCHIP waivers to states interested in expanding coverage to childless adults and children over 200% of the federal poverty line. However, a number of states currently provide SCHIP coverage to children at 300% of the poverty line and above. Senate Finance Committee Chairman Max Baucus (D-MT) stated that maintaining existing coverage for recipients (both children and adults) and expanding SCHIP to include more children are some of his top priorities for SCHIP reauthorization.
Democrats also criticized the Administration for sparing Medicaid Advantage (MA) plans from cuts in its FY 2008 budget request, while proposing significant cuts to fee-for-service providers, and stated their disagreement with proposals to change the tax system's treatment of health care benefits.
Unions and Employers Join for Health Care Reform Campaign
This week, the formation of a new health care reform coalition was announced at a press conference led by Lee Scott, CEO of Wal-Mart, and Andy Stern, President of Service Employees International Union (SEIU). The leaders of two organizations with widely-publicized competing agendas came together to unveil the "Better Health Care Together" campaign which enlists four of the largest employers in the U.S., two major labor unions, and bipartisan representatives from several think tanks.
The group, which has not endorsed any specific health care system, will be campaigning for major health care reform, including universal coverage, by the year 2012. The group believes that the current employer-based health care system is outdated and supports the development of new system allowing businesses, governments and individuals to share in the financial responsibility of insuring all Americans.
The coalition plans on recruiting more organizations and lobbying local, state and federal elected officials for a "systemic, rather than piecemeal solution" to the health care coverage problem. They will be holding a national summit on their campaign in May.
Upcoming Events
Hearings FDA Efforts to Assure the Safety of the Drug Supply
Tuesday, February 13, 2007
House Energy and Commerce - Subcommittee on Oversight and Investigations
9:15 a.m., 2123 Rayburn Bldg.
Small-Business Health Care Issues
Senate Small Business and Entrepreneurship Committee
10 a.m., 428-A Russell Bldg.
Paid Sick Leave
Senate Health, Education, Labor and Pensions Committee
10 a.m., 430 Dirksen Bldg.
Fiscal 2008 Budget: Military Health Care
House Armed Services - Subcommittee on Military Personnel
2 p.m., 2212 Rayburn Bldg.
Fiscal 2008 Budget: Medicare and Medicaid
House Ways and Means - Subcommittee on Health
2 p.m., 1100 Longworth Bldg.
Wednesday, February 14, 2007
Mental Health Funding, Head Start Legislation
Senate Health, Education, Labor and Pensions Committee
10 a.m., 430 Dirksen Bldg.
Social Security Disability Backlog
House Ways and Means - Subcommittee on Social Security
2 p.m., B-318 Rayburn Bldg.
Fiscal 2008 Budget: VA Health Programs
House Veterans' Affairs - Subcommittee on Health
2 p.m., 334 Cannon Bldg.
Thursday, February 15, 2007
Health Care Access and the Aging of America
House Appropriations - Subcommittee on Labor, Health and Human Services, Education, and Related Agencies
2 p.m., 2359 Rayburn Bldg.
For More Information
For further information on any topics discussed or publications listed, or to get copies of anything mentioned in this alert, please call 202.466.6550 and ask for the Legislative Practice Group.
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