Tim Holden: Health reform bill lacks cost control

The bill is greatly flawed and the fact is it does nothing to lower the rate at which health care costs are rising.**** This is not my interpretation, this is a statement reaffirmed several times by Doug Elmendorf, director of the objective, nonpartisan Congressional Budget Office.  (SEE BELOW)

This bill cuts payments to hospitals, nursing homes, visiting nurses, home care, hospice care, Medicare Advantage and does not adequately fund a Medicaid program it expanded.

The gross cost of Medicare cuts was $502 billion over 10 years. At a time when unemployment is more than 10 percent and our national debt is approaching $12 trillion, I could not support a bill that costs more than $1 trillion but did nothing to ensure overall health care costs will stop rising and cut Medicare.

Currently, health care costs account for 18 percent of our gross domestic product. Fiscally, the goal of any health reform should be to increase the value of health care and slow the rate of growth in health costs. There is no language in H.R. 3962 to ensure illegal immigrants will not be able to purchase coverage on the exchange — which is set up using federal tax dollars. *** (SEE BELOW)

While there is language ensuring they will not be able to receive affordability credits, there is nothing to keep them from purchasing a government-provided plan with their own dollars. Only the Senate Finance Committee’s version expressly exempts them from the mandate to have health coverage.

Further, this bill extracts $500 billion from projected Medicare spending over 10 years. For hospitals in Pennsylvania right now, Medicare reimburses 94 cents for every dollar worth of services hospitals provide to Medicare patients.

Under H.R. 3962, rates will be negotiated by an administration official, where this 94 cents is the price floor, and whatever is the average of what private plans reimburse is the price ceiling.

Medicare rates already are below value, and this bill cuts $155 billion in payments to hospitals over 10 years. These are real and devastating cuts to our hospitals.

Nursing homes also are facing $32 billion in cuts. This is an industry already underpaid by Medicaid by $4.2 billion each year, and facing a decrease from another funding source will not help an already struggling industry. Additionally, in the 17th District, the visiting nurses and home health industries are largely nonprofit.

Under this legislation, those industries would face $300 million in losses — forcing 43 percent to operate in negative profit margins next year. This will mean seniors and vulnerable populations will lose these services. **** (SEE BELOW)

Perhaps in a more urban area where there are overlapping providers, filling these gaps would be easier, but in our district, where providers already are struggling, it will mean a lack of service.

I am hopeful Congress can continue our work toward a bill that includes the elimination of penalties on pre-existing conditions, closing the Medicare prescription drug doughnut hole, allowing the purchase of insurance across state lines, removing the cap on benefits, addressing the critical issue of rising premiums, and ensuring seniors, young people and families are no longer faced with debilitating debt to stay healthy.

*** FACTS:

CBO Affirms H.R. 3962 Will Control Costs, Lower Premiums
Washington, D.C. 

http://edlabor.house.gov/newsroom/2009/11/cbo-affirms-hr-3962-will-contr.shtml

 — Today the Congressional Budget Office (CBO) released estimates confirming that H.R. 3962 — the Democratic health reform bill — will succeed in controlling costs that will be reflected in individual and family premiums.  CBO found that by 2016, premiums will be $5,300 for an individual and $15,000 for a family of four in the Exchange.  This is well below the $24,000 family premium expected if Congress fails to act and premiums grow as projected under current law.