By John Ballard
This is tonight's news.
By tomorrow it will be out of date. I heard on the radio that Senator Boehner already characterized the president's proposal as a "Democrat infomercial." So much for good will and comity.
Terry Gross interviewed Paul Blumenthal of the Sunlight Foundation tonight in a segment called Connecting The Dots Between PhRMA And Congress. It should have been headlined "Spilling the Beans on the Administration," subtitled How Obama and his staff shacked up with Billy Tauzin and Max Baucus and almost got away with it.
GROSS: And who are the main representatives from the Obama administration meeting with these members of the pharmaceutical industry?
Mr.BLUMENTHAL: The chief people include the chief of staff at the White House, Rahm Emanuel, and the deputy chief of staff who is involved in more of the meetings, Jim Messina, who happens to be the former chief of staff to Max Baucus in the Senate.
GROSS: So Max Baucus, who is the head of the Senate Finance Committee that drew up the Senate health care bill, he already had contacts with the health care industry. How did he make those contacts?
Mr.BLUMENTHAL: Well, those contacts were made over a series of years. He was previously the ranking member of the Senate Finance Committee when the Republicans were in charge, when they were passing prescription drug expansion for Medicare. And he was deeply involved in those negotiations for that legislation.
He also has a large number of former staffers who have gone on to lobby, and a number of those have become lobbyists for pharmaceutical industry groups and for other health care organizations. One of the chief former staffers of his is his former chief of staff, David Castagnetti, who is a major lobbyists in Washington, who lobbies for PhRMA and America's Health Insurance Plan, among another maybe 10 or so health care companies. Baucus is also a major fundraiser in - from 2003 to 2008, raised well over a million dollars from the health care industry for his election.
GROSS: If you're just joining us, my guest is Paul Blumenthal. He's a senior writer with the Sunlight Foundation, which is a nonpartisan, nonprofit group that advocates for more openness and transparency in government.
Now, Billy Tauzin is an interesting character, and he is the chief lobbyist for PhRMA, the main pharmaceutical industry lobby. He has an interesting history in terms of how he crossed over from Congress to the pharmaceutical industry. Tell us a little bit about his history as a congressman.
Mr.BLUMENTHAL: Well, Billy Tauzin was a longtime Democrat in the House who, in 1994, after the Democrats lost their majority, switched over to being a Republican. As a Republican, he held the same seniority that he had as a Democrat and began to quickly move up to become the chairman of the House Committee on Energy and Commerce, which is one of the most powerful committees in the House of Representatives.
And in 2002 and 2003, he took up this issue of expanding Medicare to cover prescription drugs, and at this time, it was a pretty controversial issue for Republicans, as many of them opposed this new expansion of safety net program, and Tauzin seriously pushed for this bill, helped craft the bill and, in a lot of instances, met behind closed doors with pharmaceutical industry leaders to help craft the bill, which did not include any of these cost-cutting measures that we've already talked about that he later on got to keep out of the 2009 health care reform bill: re-importation of drugs, negotiations like the VA has.
So the bill was seen by a lot of people as really just a handout to this industry, and pretty soon afterwards, he announced he was retiring from Congress and that he was in negotiations with the pharmaceutical industry lobby to become their president at a $2-million-a-year salary.
GROSS: So how much of a role do you think that the pharmaceutical industry leaders and lobbyists who met with Max Baucus, how much of a role did they have on shaping the bill that emerged from his committee?
Mr.BLUMENTHAL: I don't know if I can totally answer that question, but I think considering Baucus' history, I'm sure that there was a decent amount of industry influence.
I think that the key in what happened in Baucus' committee is that the White House made this deal with the pharmaceutical companies and told them to only go through Baucus, that they were only supposed to work with him, and no other committee in Congress really knew about these deals going on behind the scenes, except for Baucus.
And so the entire health care reform effort really relied on whatever process Max Baucus was going to go about using to create a bill, which wound up being a fairly drawn-out process after bills had passed every other relevant committee in the House and the Senate.
There's a lot more. Pretty disgusting stuff, really. I had to ventilate the car as I listened and was glad when it ended.
Twenty minutes at the link if anyone wants to hear.
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Meantime, Dr. Tim Jost, whom I have linked several times before, has a very workmanlike summary of the president's proposal, covering the main points and how it differs from both the Senate and House bills.
I may not be pretty, especially in light ot what I just posted, but it's still better than nothing. The unhappy reality is that if nothing is passed the train wreck will be even more catastrophic than it otherwise might be.
Of all of the reforms found in the last four-fifths of the bill, the Medicaid expansions are the most important for extending access to care and are the most integrally related to the insurance reforms of Title I. Under current federal law and the law of most states, Medicaid eligibility is not based on poverty alone; an applicant must usually also be over sixty-five, disabled, blind, a child, or the parent of a child. These categories go back to the 1930s, when social welfare assistance was extended only to the �worthy poor.�
The Senate health reform legislation would, effective 2014, extend Medicaid assistance to all U.S. citizens with a modified adjusted gross income of less than 133 percent of the poverty level, currently $14,404 for an individual and $29,327 for a family of four. (By comparison, a forty-hour-a-week job paying the minimum wage for fifty-two weeks a year would currently gross $15,080.) The newly eligible population would be offered a benefits package similar to that available through the exchanges to the general nongroup population. The House would have expanded Medicaid to citizens earning up to 150 percent of the poverty level, but the President�s Proposal adopts the Senate�s 133 percent eligibility level. The proposal would, moreover, eliminate income disregards currently applied by the states, so the eligibility expansion would be even less generous than it would appear at first glance (although it would leave a 5 percent income disregard for certain Medicaid eligibility determinations).
The CBO projects that Medicaid expansions would cover an additional 15 million Americans, increasing the Medicaid population to 50 million. Moreover, a recent Rand study estimates that an additional 9 million Americans, 38 percent of those remaining uninsured under the Senate bill, would be eligible for Medicaid but would not be enrolled. These persons would be afforded a level of financial security by the legislation, since they would in most instances be signed up for Medicaid by health care providers if they required expensive medical care. The Senate legislation also extends the CHIP program through 2019, and funding for it through 2015. The Medicaid expansions and CHIP extension are essential to undergird the insurance reforms of Title I, since they ensure coverage to those Americans who are simply too poor to participate in the reformed insurance market.
The Medicaid expansions, however, present a serious problem. Historically, Medicaid has been funded jointly by the federal and state governments, with the federal government funding at least half of the cost of the program, but considerably more in lower-income states. Medicaid is a countercyclical program, with enrollment expanding during recessions just as state revenues are plummeting. The states are currently in terrible financial shape, and Medicaid is one of their greatest burdens. Recognizing that the states are in no position to expand Medicaid coverage, the Senate bill provided for 100 percent federal funding for expansion populations for 2014 to 2016, with federal funding settling eventually at a rate between 82.3 percent and 95 percent. CHIP funding is increased by 23 percentage points, effective October 2015.The President�s Proposal would extend 100 percent federal funding to the states for the Medicaid expansion population further, through 2017. It would also provide 95 percent funding for 2018 and 2019, and 90 percent for 2020 and subsequent years. It would eliminate Nebraska�s �Cornhusker� kickback, one of the most derided compromises in the Senate bill, while increasing by 8 percent federal matching rates for states that have already expanded Medicaid coverage to adults with incomes below 100 percent of the poverty level, beginning in 2014.
The President�s Proposal only begins to solve the problems currently affecting Medicaid. One of the greatest of these is inadequate provider payment levels. In most states, Medicaid pays providers significantly less than Medicare, which in turn pays less than private insurance. The House bill would have provided federal funding to increase payments for primary care providers up to Medicare levels, but the Senate bill does not. The President�s Proposal follows the Senate bill.
Other features include phasing out Medicare Advantage, an insurance industry wet-dream created in the Bush years that costs Medicare fourteen or fifteen percent more per beneficiary than Medicare, closing the famous "donut hole" in Medicare Part D (the pharmaceutical industry's wet dream from the Bush years) and a few other features including the CLASS Act that I wrote about the other day.
Other provisions tagged "fraud and abuse" are included for some reason. It seems to me that fraud and abuse are issues that should not require additional legislation if officials administering tax money are doing their jobs but perhaps a few bells and whistles are harmless enough. When the evening news runs features about wasted money as regular weekly items, and Dateline, Sixty Minutes and 20-20 can always fill in a slow week with yet another fraud, waste and abuse segment it makes me wonder what the hell is going on with the people in charge.
When critics say reforms will cost a lot they are exactly right. What they fail to admit is that without reforms the costs will be even more. The pool of uninsured and under-insured people is getting bigger. And it is reasonable to expect that when sick or injured people try to save money by not seeking medical attention their future expenses will be more, not less than if they had been appropriately cared for when the medical problem presented.
Those who argue against mandating universal participation are excusing those who are young, well and working who claim not to "need" insurance. That is true, of course, at the moment. But it is a mathematical certainty that young people will not remain young, well people will eventually get sick, and all who are in good shape will eventually require medical attention sometime before they die. The need for medical care may not be individually universal at the moment, but the time will come when everyone can expect to join the club.
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