Wednesday, February 01, 2006

Just remember-- this is what Republicans are all about.

The White House and Republicans may have backed off of President Bush's promise to cut mideast oil imports (hat tip to Dorsano for that) just the day after he made it (why did he say it, then?) but they made good on one of his priorities: Today the House passed a budget bill that includes cuts in medicaid and student loans. The vote on passage was 216-214 (funny how Republicans always manage to pass this kind of stuff by just the margin they need, while a few of their more vulnerable members get to vote against it.)

Of course, this makes a lot of sense since cuts in other sources of government funding for universities have resulted in sharply higher tuition. Apparently the intent of these Republicans really is to create a plutocracy-- make a four year college degree (which is required for most leadership positions) the exclusive purview of the wealthy. Sure there are scholarships, but the number of scholarships available is far less than the number of students who are accepted at American universities and colleges every year. The net effect will be to lock out middle class families if they don't have a genius or a basketball star in the home.

An analysis of the December 18 budget reconciliation agreement is linked to here. The reason for the re-vote (this is the same bill that was passed on Dec. 19) is because of technical differences between the House and Senate bills (nothing substantive however.) According to the analysis, which I blogged originally on Dec. 19 on CRFA (same bill, so I am revisiting the analysis I made then)

Cuts in Medicaid will require higher co-payments and lower benefits to poor people on the program. Now, I realize that everyone in America, even if they have insurance, are now seeing higher co-payments and lower benefits. And in that context, it is worth noting that the 'managed care' plans we have now ARE the Republican answer to the Democratic proposal for Universal Heathcare in 1994. However, the failure of the GOP model should not mean that we will now penalize the poorest of Americans, in one of the few programs where people CAN avoid having to worry about changing their doctor or being turned away for healthcare due to lack of coverage.

Higher benefit cuts in the area of 'asset protection' for middle class people who want nursing home care than were in either the original House bill or the original Senate bill. 'Asset protection' allows people to have something left they can pass on to their families even if they need long term health care.

For example, one provision of the House bill that appears to have been retained in the conference report would penalize many non-affluent individuals who make modest gifts to relatives or contributions to charity, and then experience an unexpected decline in their health several years later that causes them to need long-term care. So, if for example, your parents gave you some money last year, or made a donation to Hurricane Katrina relief or tsunami relief, and then in a few years they get sick and need nursing home care, they will be asked to give that same money to the nursing home, or what is spent on their care will decline commensurately. This makes clear that the people who are always going on about how bad inheritance taxes are (they prefer to use the term, 'death tax') want to make sure that if you are middle class and have a lingering disease, no you won't have anything to pass on-- the nursing home will get it all (and it makes it clear that the position of the Bush administration opposing the Oregon voluntary euthanasia law is actually quite sinister-- it almost seems as though it is their INTENT to make sure that every penny that can be stolen from the middle class and redistributed to corporate interests is taken-- even if it means forcing terminal patients to suffer for years until every penny they have ever earned is snatched away by health care providers.)

The conference agreement includes Medicaid reductions in this area of $2.4 billion over five years and $6.4 billion over ten years (higher than the $2.2 billion over five years and $5.8 billion over ten years in the House-passed bill). The Senate’s more targeted and carefully designed provisions in this area would have produced savings of $335 million over five years and $890 million over ten years.

There were some winners in the budget bill, however:

The conference report’s health care provisions also move toward the House bill in another respect: they cater to powerful special interests — in particular, the pharmaceutical and managed care industries — at the expense of low-income beneficiaries...

The conference report also protects Medicare managed care plans. It drops a Senate provision that would have eliminated a wasteful $10 billion slush fund to encourage participation in Medicare by regional Preferred Provider Organizations (PPOs). The Medicare Payment Advisory Commission (MedPAC) — the official, independent advisory body to Congress on Medicare payment policy — recommended this summer, in a nearly unanimous vote, that this fund be eliminated because it is unnecessary and unwarranted and provides an unfair competitive advantage to PPOs over traditional Medicare fee-for-service and other managed care plans such as Medicare HMOs. Nevertheless, the conference agreement leaves this fund fully intact.

This is the provision by which PPO's are paid to be willing to accept other government money that comes via Medicare. A payment to be willing to get paid. But this remains intact.

Partially gutting another provision to curb overpayments to managed care plans: There is near-universal agreement among analysts that the current Medicare payment structure provides excessive payments to managed care plans, and the Administration announced earlier this year that it would act administratively to eliminate a feature of the payment formula that is responsible for a significant volume of excessive payments... it appears that the conference agreement is written so the part of the Medicare payment formula that would be reformed would revert to its current, problematic status after five years, and after that time, managed care plans would again receive the overpayments this provision is supposed to curb.

Outright overpayment to some healthcare providers, and they can't even permanently eliminate that. I wonder if there is also a line in there somewhere for continuing to fund fraud.

Other cuts included in the bill include cuts in child support enforcement (obviously lobbying for the votes of deadbeat parents), welfare-to-work programs (I guess because they have been so successful, they no longer have enough 'welfare queens' to beat up on so they need to create a new generation of them to support right-wing rhetoric), child care funding, SSI disability payments, and foster care funding.

Maybe that is why the House leadership was forced to change the rules and release, let members study and vote on this monster in four and a half hours on the morning of Dec. 19, between 1:12 AM and 5:43 AM (which might also explain why this time around there were so many more Republican 'no' votes-- some of them actually have had time to read the bill.)


Anonymous said...

Eli, I thought you were above this kind of rhetoric. If a department traditionally receives a 6% increase and they are told they are only going to get a 3% increase that is not a cut. They may perceive it as a cut; but it is not one. More of this needs to be done in Washington. I won't like it when it happens to my favorite programs (Dep. of Ed. or EPA) but it still needs to be done. Overall our government should not grow any faster than inflation.

Here is a good non-partisan explanation:

Eli Blake said...


Apparently you didn't read through the analysis. If you make a donation to charity and then get sick several years later, and they hold against you in determining benefits the gift you made several years earlier, that seems to me to qualify as a cut.

Anonymous said...


I did read that part but I did not understand it. Must be my thick headded conservatism. I still don't get it.

The 6% vs. 3% and calling that a cut is still wrong. Will you admit?

Anonymous said...

Okay. I read it a third time and think I am starting to catch on. Say I had personal savings of $2 million (is this a reasonable number? if not what is?) and did not qualify for Medicare coverage. I can't just "give" the $2 million away so that I do qualify for coverage.

Hasn't the middle class played a game of this for years? Giving their money to their spouses or kids so they could get free medical care? Isn't it reasonable that they should pay some of the cost if they have the means? I do want people to be able to leave money to thier family. But I understand the government wanting to close a loop-hole.

Say I only had $20,000...would I have to spend all of it on medical care or would some be left to leave to my family?

Eli Blake said...


True that a 3% increase is not a cut. Of course within the programs, there are some definite cuts which are in fact cuts (since the 3% increase is not uniform). And as I made a point of showing, there are some areas where money is being wasted (what else would you call payments to providers to 'agree' to get paid), and it is unfortunate that those are still there.

Closing the loophole, that's fine (although again, if we had universal healthcare there would be no need to close it since people would not be sucked dry by a terminal illness). The time frame is an issue though. It is hard to predict what you health will be like in several years. Now since 90% or more of the population has less money than they would need to foot the bill for the most expensive type of brain cancer, would you therefore say that none of those 90% should ever give any money to their kids? At what point is it 'closing a loophole' and at what point is it punitive? On the whole, this is one area where if I err, I would prefer to err on the side of compassion (maybe that's why I'm a liberal.)

I've known people of modest but sufficient means who lost everything because of medical bills, so this isn't just a theoretical consideration. The fact that the system does nothing for them except allow them, even if they survive (or if they don't for that matter) to lose everything they own to pay for treatment, is frankly immoral (and you won't change my opinion that a system that does this to people is cruel and immoral.)

I've had a number of posts that touched tangentially on the issue and even described it at some length, but I think I will have to put together a post on why we need a national health care plan, look for it in the next few days once I have time to sit down and get my facts all together and do it.

dorsano said...

This is a cut to Medicaid - health care costs have risen beyond expectation

There's three choices

1). eat the increase.
2). cut the benefit.
3). fix the root cause.

The GOP leadership chose door number 2.

Elected Democrats aren't much advocating anymore for door number 3.

The country doesn't have the stomach for door number 1.

If nothing is none, health savings accounts will become the norm

and money that is currently being used to keep the lights on in hospitals will be redirected to the personal savings accounts of those who are healthy

and hospitals will start turning out their lights

while unhealthy patient risk pools go bankrupt themselves.

Let's all just keep on fighting this culture war

Rah, Rah, Rah