Showing posts with label Congress. Show all posts
Showing posts with label Congress. Show all posts
Thursday, April 29, 2010
Understanding Insurance: Will a Public Option or Co-op Get US Where We Want?
Today's commentary comes from an article I'd written for the Journal of the American Osteopathic Association and published today. Please click here.
Thursday, April 15, 2010
Medicare SGR Update
The Senate passed HR 4851, the Continuing Expansion Act of 2010, this evening preventing the scheduled Medicare cut until June 1, 2010. The bill was passed in the House before the Spring recess with an effective date through May 1, 2010. The Senate bill is being sent back to the House for approval to reconcile of the dates. It is expected to pass this week.
Wednesday, April 14, 2010
Opportunity Forfeited by National Physician Groups
Today, the Senate is expected to vote on HR 4851, the Continuing Expansion Act of 2010. It will maintain Medicare payments on the level prior to the 21.3% cut which occurred April 1, 2010 because Congress has not yet permanently fixed the Medicare Sustainable Growth Rate (SGR) formula. Until now, CMS has been holding claims payments hoping for another Congressional fix; but the agency can only hold claims for 10 business days and must begin payments on April 15. If Congress approves this billl, it will kick the proverbial can down the road for another month, with another fix needed on May 1, 2010.
The question is why would our national physician organizations endorse a supposed comprehensive health reform plan that did not assure that physicians would be able to afford to continue to provide services to their patients? Did they not understand who their members are and that this is not a fiscally feasible business model for physicians? Why would such powerful organizations, with lawyers on staff, give up their leverage in bargaining for a permanent SGR fix for a politician's promise to take care of it at a later date? Did they all fail Negotiations 101?
At first, I too, believed that might have been the case, but that is perhaps too easy an answer. In hearing the coments of some of Democratic politicians (who eventually voted again the bill) regarding the arm twisting that went on behind the scenes, I heard one congressman say they were effectively told how lucky they were to even be invited to the table, otherwise they would have been the main course. Funny, I heard the same words from the leadership of one of our national physician organizations at the end of November. Coincidence?
Physicians representing national physician organizations may have been invited to the photo-ops, but at best, they were only give a crumb or two that fell on the floor with offers to study solutions to the malpractice problem. They were cleasrly not invited to the table to find solutions for healthcare delivery. Were they tricked into believing attendence was participation?
Given the Chicago-style politics in Washington today and the Chicago roots of our largest organizations, were they also strong armed? Did they willingly let the wool be pulled over their eyes? Was it Stockholm syndrome? Or perhaps the did fail Negotiations 101...
The question is why would our national physician organizations endorse a supposed comprehensive health reform plan that did not assure that physicians would be able to afford to continue to provide services to their patients? Did they not understand who their members are and that this is not a fiscally feasible business model for physicians? Why would such powerful organizations, with lawyers on staff, give up their leverage in bargaining for a permanent SGR fix for a politician's promise to take care of it at a later date? Did they all fail Negotiations 101?
At first, I too, believed that might have been the case, but that is perhaps too easy an answer. In hearing the coments of some of Democratic politicians (who eventually voted again the bill) regarding the arm twisting that went on behind the scenes, I heard one congressman say they were effectively told how lucky they were to even be invited to the table, otherwise they would have been the main course. Funny, I heard the same words from the leadership of one of our national physician organizations at the end of November. Coincidence?
Physicians representing national physician organizations may have been invited to the photo-ops, but at best, they were only give a crumb or two that fell on the floor with offers to study solutions to the malpractice problem. They were cleasrly not invited to the table to find solutions for healthcare delivery. Were they tricked into believing attendence was participation?
Given the Chicago-style politics in Washington today and the Chicago roots of our largest organizations, were they also strong armed? Did they willingly let the wool be pulled over their eyes? Was it Stockholm syndrome? Or perhaps the did fail Negotiations 101...
Wednesday, March 31, 2010
As Academia Slept...the Government Took Over
The dearth of media coverage regarding the federal takeover of the federally funded student loan program (i.e. Sallie Mae) and the elimination of private lending via the Federal Family Education Loan (FFEL) program, is astounding. Americans were caught off-guard, when the political debate seemed to be about healthcare. After the fact, most assumed it was Washington padding the bill to make the healthcare numbers look more favorable.
With the government now the only lender to students, do you believe tuition increases will be permitted to continue unabated? "The National Association of Independent Colleges and Universities (NAICU), says...the average annual increase in tuition and fees has been 6 percent over the last 10 years... Do the math and you'll see that an average annual increase of 6% leads to an 80% rise in tuition costs over just one decade!" [Money and Markets and Federal Reserve Bank of St. Louis]
Our government is already in hoc up to its proverbial eyeballs to foreign debtors and in danger of losing its triple AAA credit rating. Why would it choose to take on more long-term debt, especially with student loan default rates reaching a nine year high of 6.5%? Defaults typically increase in tough economic times; consider the last recession, in 1989, when default rates reached 22%. Given that less foreign creditors are showing up at Treasury Department auctions, and the Federal Reserve is now monetizing the debt (buying unsold Treasuries at auction) - Why would the government choose to become the sole provider of funds for federal loans [Stafford and PLUS] at this time?
With money tight in the public sector and credit tight in the private sector, wouldn't it make better sense to reform the interest subsidy and loan guarantee process to guarantee more loans for less money ( paying only on the unrecoverable amount of the defaulted loans), Rather than tie up money directly laying out the entire sum of the loan? After all, we do not have a sovereign wealth fund with money lying around to invest, as some countries do.
Given that all federal student loans will be subject to and administered by the Department of Education, which is funded at Congress' discretion, and given this Congress' track record for deal making - do you believe that these will continue to be distributed without favoritism to all those in need? As money gets tighter, will some states receive preferential treatment? Will the alma maters of certain politicians receive favoritism? Will certain degree programs receive preference? Where will osteopathic medical schools fall in this mix? Will physicians receive less favorable terms going forward if they are training in specialties or geographic areas which are not deemed shortage areas? What happens when the government decides to apply a Sustainable Growth Rate (SGR) formula to tuitions because there is not enough money to go around?
Given the current trends in Washington to "never let a crisis go to waste" - was this good economics, concern for students or control?
I invite your comments -
With the government now the only lender to students, do you believe tuition increases will be permitted to continue unabated? "The National Association of Independent Colleges and Universities (NAICU), says...the average annual increase in tuition and fees has been 6 percent over the last 10 years... Do the math and you'll see that an average annual increase of 6% leads to an 80% rise in tuition costs over just one decade!" [Money and Markets and Federal Reserve Bank of St. Louis]
Our government is already in hoc up to its proverbial eyeballs to foreign debtors and in danger of losing its triple AAA credit rating. Why would it choose to take on more long-term debt, especially with student loan default rates reaching a nine year high of 6.5%? Defaults typically increase in tough economic times; consider the last recession, in 1989, when default rates reached 22%. Given that less foreign creditors are showing up at Treasury Department auctions, and the Federal Reserve is now monetizing the debt (buying unsold Treasuries at auction) - Why would the government choose to become the sole provider of funds for federal loans [Stafford and PLUS] at this time?
With money tight in the public sector and credit tight in the private sector, wouldn't it make better sense to reform the interest subsidy and loan guarantee process to guarantee more loans for less money ( paying only on the unrecoverable amount of the defaulted loans), Rather than tie up money directly laying out the entire sum of the loan? After all, we do not have a sovereign wealth fund with money lying around to invest, as some countries do.
Given that all federal student loans will be subject to and administered by the Department of Education, which is funded at Congress' discretion, and given this Congress' track record for deal making - do you believe that these will continue to be distributed without favoritism to all those in need? As money gets tighter, will some states receive preferential treatment? Will the alma maters of certain politicians receive favoritism? Will certain degree programs receive preference? Where will osteopathic medical schools fall in this mix? Will physicians receive less favorable terms going forward if they are training in specialties or geographic areas which are not deemed shortage areas? What happens when the government decides to apply a Sustainable Growth Rate (SGR) formula to tuitions because there is not enough money to go around?
Given the current trends in Washington to "never let a crisis go to waste" - was this good economics, concern for students or control?
I invite your comments -
Tuesday, March 23, 2010
The Real Arithmetic of Health Reform
Below are excerpts from a former director of the CBO who lays out the math in a NYTimes Op-Ed:
THE REAL ARITHMETIC OF HEALTH REFORM
"On Thursday, the Congressional Budget Office reported that the latest health care reform legislation would, over the next 10 years, cost about $950 billion, but it would also lower federal deficits by $138 billion. In other words, a bill that would set up two new entitlement spending programs — health insurance subsidies and long-term health care benefits — would actually improve the nation’s bottom line. Could this really be true? [Not according to Douglas Holtz-Eakin, former director of the Congressional Budget Office (CBO) and president of the American Action Forum.]
How can the budget office give a green light to a bill that commits the federal government to spending nearly $1 trillion more over the next 10 years? The answer, unfortunately, is that the budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out.
In reality, if you strip out all the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges:
The health care reform legislation would raise, not lower, federal deficits by $562 billion," says Holtz-Eakin.
"...The bill front-loads revenues and backloads spending...(meaning) the taxes and fees it calls for are set to begin immediately, but its new subsidies would be deferred so that the first 10 years of revenue would be used to pay for only 6 years of spending."
"...To operate the new programs over the first 10 years, future Congresses would need to vote for $114 billion in additional annual spending, but this so-called discretionary spending is excluded from the CBO's tabulation."
"...In perhaps the most amazing bit of unrealistic accounting, the legislation proposes to trim $463 billion from Medicare spending and use it to finance insurance subsidies, but Medicare is already bleeding red ink and the health care bill has no reforms that would enable the program to operate more cheaply in the future..."
"The bottom line is that Congress would spend a lot more; steal funds from education, Social Security and long-term care to cover the gap; and promise that future Congresses will make up for it by taxing more and spending less," says Holtz-Eakin.
Excerpted from: Douglas Holtz-Eakin, "The Real Arithmetic of Health Care Reform," New York Times, March 20, 2010.
For full text of article: http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html
THE REAL ARITHMETIC OF HEALTH REFORM
"On Thursday, the Congressional Budget Office reported that the latest health care reform legislation would, over the next 10 years, cost about $950 billion, but it would also lower federal deficits by $138 billion. In other words, a bill that would set up two new entitlement spending programs — health insurance subsidies and long-term health care benefits — would actually improve the nation’s bottom line. Could this really be true? [Not according to Douglas Holtz-Eakin, former director of the Congressional Budget Office (CBO) and president of the American Action Forum.]
How can the budget office give a green light to a bill that commits the federal government to spending nearly $1 trillion more over the next 10 years? The answer, unfortunately, is that the budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out.
In reality, if you strip out all the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges:
The health care reform legislation would raise, not lower, federal deficits by $562 billion," says Holtz-Eakin.
"...The bill front-loads revenues and backloads spending...(meaning) the taxes and fees it calls for are set to begin immediately, but its new subsidies would be deferred so that the first 10 years of revenue would be used to pay for only 6 years of spending."
"...To operate the new programs over the first 10 years, future Congresses would need to vote for $114 billion in additional annual spending, but this so-called discretionary spending is excluded from the CBO's tabulation."
"...In perhaps the most amazing bit of unrealistic accounting, the legislation proposes to trim $463 billion from Medicare spending and use it to finance insurance subsidies, but Medicare is already bleeding red ink and the health care bill has no reforms that would enable the program to operate more cheaply in the future..."
"The bottom line is that Congress would spend a lot more; steal funds from education, Social Security and long-term care to cover the gap; and promise that future Congresses will make up for it by taxing more and spending less," says Holtz-Eakin.
Excerpted from: Douglas Holtz-Eakin, "The Real Arithmetic of Health Care Reform," New York Times, March 20, 2010.
For full text of article: http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html
Monday, November 23, 2009
HR 3962: Why is Government Insuring the Already Well-Insured?
HR 3962 provides current retirees with protection against reductions in retiree health benefits now offered by companies or employee organizations. Historically, this has been a popular benefit with unionized companies, particularly in manufacturing. This bill does not mean that such plans must continue the same benefits for current employees. Most retiree health plans will not be able to as they tend to be underfunded given usage patterns and health status. With the Cadillac health plans provided, these employees are accustomed to going to the doctor for every sniffle. These retirees also tend to have metabolic syndrome - obesity, diabetes and hypertension, as well as, cardiovascular disease and tend to need joint replacements to a greater degree than the general population.
However, retirees need not worry because under this bill the US government becomes the reinsurer of retiree health benefits. This means the US taxpayer will underwrite future benefits for these folks. Here's how it works: If the retiree has a large claim, the plan will pay the first $15 thousand in medical expenses. The government will pay 80% of the next $75 thousand in claims up to $90 thousand in claims. If there is a $90 thousand claiming a given year, the US Government will reimburse the plan $60 thousand or in this example 2/3 of the costs. Benefits will be paid from the Retiree Reserve Trust Fund, with $10 billion from the US Treasury. It would seem these people are better off than most retirees. What reason would our politicians in Washington have for being so generous with our tax dollars for people who already have retiree health benefits?
According to this legislation, the DHHS Secretary can stop taking applications for participation in the program or reduce payouts at any time to ensure the government reinsurance program does not exceed the appropriated funds. This gives the government considerable leverage over private retiree health plans. It also gives the government considerable leeway in how to administer the trust fund, who may receive reimbursement and at what levels should the fund run out of funds. Given this $10 billion is a one time appropriation according to the CBO budget analysis (Page 11), what happens when the money does run out? This would seem to place the current politicians in Congress in a powerful position for future elections with one of the most active and well-mobilized voting blocks.
However, retirees need not worry because under this bill the US government becomes the reinsurer of retiree health benefits. This means the US taxpayer will underwrite future benefits for these folks. Here's how it works: If the retiree has a large claim, the plan will pay the first $15 thousand in medical expenses. The government will pay 80% of the next $75 thousand in claims up to $90 thousand in claims. If there is a $90 thousand claiming a given year, the US Government will reimburse the plan $60 thousand or in this example 2/3 of the costs. Benefits will be paid from the Retiree Reserve Trust Fund, with $10 billion from the US Treasury. It would seem these people are better off than most retirees. What reason would our politicians in Washington have for being so generous with our tax dollars for people who already have retiree health benefits?
According to this legislation, the DHHS Secretary can stop taking applications for participation in the program or reduce payouts at any time to ensure the government reinsurance program does not exceed the appropriated funds. This gives the government considerable leverage over private retiree health plans. It also gives the government considerable leeway in how to administer the trust fund, who may receive reimbursement and at what levels should the fund run out of funds. Given this $10 billion is a one time appropriation according to the CBO budget analysis (Page 11), what happens when the money does run out? This would seem to place the current politicians in Congress in a powerful position for future elections with one of the most active and well-mobilized voting blocks.
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