WASHINGTON WIRE

February 3, 2006
Issue 87

In this issue, you'll find:

House Passes Deficit Reduction Act
Senate Approves High-Risk Health Insurance Bill
House Elects John Boehner as New Majority Leader
Medicare Part D Transition Period Extended 60 Days
Hearings

Top Story

House Passes Deficit Reduction Act

On February 1, 2006, the House passed the $39 billion Deficit Reduction Act of 2005, approving a number of substantial changes to both the Medicaid and Medicare programs.

The Senate voted on the bill before leaving for the December recess, but made some minor changes to the conference report, thereby referring the bill back to the House for a final vote.

Following a brief debate on Wednesday, the House passed the legislation by a vote of 216-214, with 13 Republicans voting with all the Democrats against the bill. Four Republicans, Congressman John Sweeney (NY), Congressman Jim Gerlach (PA), Congressman Jim Ramstad (MN), and Congressman Rob Simmons (CT) originally voted for the bill in December, but voted against the legislation on Wednesday. Conversely, Congressman Steve Buyer (R-IN), who originally voted against the bill, switched his vote on Wednesday. The legislation now goes to the President's desk for his signature.

The legislation will implement a number of controversial changes to the Medicaid programs, including increases in beneficiary copayments and a "tightening-up" of Medicaid asset transfer rules. However it will also enact a number of new Medicaid programs and demonstration projects including the "Family Opportunity Act," a provision to allow families of children with disabilities to buy-in to the Medicaid program.

Medicare changes in the bill include a repeal of the 4.4% physician payment cut which took effect on January 1, 2006. The legislation retrospectively freezes Medicare physician payments in 2006.

Anticipating the release of the President's fiscal year (FY) 2007 budget proposal on Monday, both House and Senate Budget Committee Chairs have hinted at another round of reconciliation in 2006. However, after the controversy surrounding the Deficit Reduction Act of 2005, it remains unlikely that Congress could move a similar bill during an election year.

Health Care News

Senate Approves High-Risk Health Insurance Bill

On Wednesday, February 1, 2006, the Senate approved HR 4519, the "State High Risk Pool Funding Extension Act of 2005." The House passed this legislation in December, 2005.

The legislation would authorize $75 million in grants for the establishment or maintenance of state health insurance pools for high-risk individuals with chronic illnesses or pre-existing conditions who are typically unable to buy private insurance. Premiums would be capped to control the cost to the beneficiary.

The bill would divide 40% of the pooled funds among all states, 30% of the funds would be dispersed based on the number of uninsured residing in each state, and the remaining 30% would be allocated according to the number of people in state risk pools.

The President is expected to sign the bill soon.

House Elects John Boehner as New Majority Leader

On Thursday, February 2, 2006, House Republicans voted Congressman John A. Boehner (R-OH) as the next Majority Leader, the second leadership position in the House of Representatives.

Congressman Boehner edged out acting Majority Leader and current Whip, Roy Blunt (R-MO), who had been serving as Majority Leader since Tom DeLay (R-TX) stepped down in September, 2005.

The new Majority Leader currently serves as the Chairman of the House Education and Workforce Committee and has stated that reforming mandatory spending programs, such as Medicare, Medicaid and Social Security, is one of his top priorities.

Medicare Part D Transition Period Extended 60 Days

On Wednesday, February 1, 2006, Health and Human Services (HHS) Secretary Michael Leavitt announced that most private Medicare Part D prescription drug plans had agreed to extend the transition period an additional 60 days in an effort to combat continuing Part D implementation problems.

This change will allow beneficiaries time to find alternative medications covered under their current drug plan that are comparable to their current prescriptions or transition onto a different plan that will cover their prescribed medications.

On Tuesday, HHS also released the Secretary's "One Month Progress Report on the Medicare Prescription Drug Benefit." The report recommends that beneficiaries enroll in a plan early, preferably before the 15th of the month, to ensure that records have enough time to reflect coverage. CMS announced last week, and the Secretary's report reiterates, that states would receive federal assistance in recouping any monies paid for Part D drugs over and above that of the drug plans reimbursements and any incurred administrative costs. CMS will work with states until February 15, 2006 to rectify any additional payment problems.

Upcoming Events

Hearings

February 7, 2006

Fiscal 2007 Budget: Overview
House Ways and Means Committee
Full Committee Hearing
1 p.m., 1100 Longworth

Human Cloning and Stem Cell Research
House Government Reform - Subcommittee on Criminal Justice, Drug Policy and Human Resources
Subcommittee Hearing
2 p.m., 2154 Rayburn

February 8, 2006

Implementation of Medicare Drug Benefit
Senate Finance Committee
Full Committee Hearing
10 a.m., 215 Dirksen

Fighting Pandemic Flu
House Homeland Security - Subcommittee on Prevention of Nuclear and Biological Attack
Subcommittee Joint Hearing
2 p.m., 2237 Rayburn

Fiscal 2007 Budget: Overview
House Ways and Means Committee
Full Committee Hearing
3:30 p.m.,1100 Longworth

February 9, 2005

Fiscal 2007 Budget: Health and Human Services
Senate Finance Committee
Full Committee Hearing
10 a.m., 215 Dirksen

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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