By John Reichard, CQ HealthBeat Editor
November 8, 2006 -- From Medicare prescription drug coverage to health savings accounts to $15 billion in global AIDS relief, President Bush gave Republicans a way to play offense on health care as they never have before—but now that Democrats are back to barking the signals in the House and perhaps the Senate as well, it may be a case of the health care varsity taking over from the jayvee.
It's not that Democrats are necessarily more likely to score legislative wins—in fact, the opposite may be true. But their passion for all the permutations of health care means it is one of their core issues and that it is likely to receive dramatically more attention on Capitol Hill.
"Democrats are more comfortable talking about health issues," said Chip Kahn, a former Hill GOP aide who is president of the Federation of American Hospitals. "I can't say what's going to happen with enacted legislation, but I think the health care discourse will be many decibels higher because Democrats like to talk about this issue."
The party's pent-up thirst for health care oversight will lead to no end of possibilities for hearings in the next Congress, said William Vaughan, a senior policy analyst for Consumers Union. For Democrats, trying to pick among potential hearing topics will be like "trying to take a drink of water from a fire hydrant," he said.
With Bush in the White House and Democrats still too few to override legislative vetoes, the next two years might shape up as a period with lots of focus on health care problems but fewer solutions. Although that's not to say that Democrats won't have a shot at legislative accomplishments.
While some proposals are likely to seem tired old reruns destined to flop yet again—incoming House Energy and Commerce Committee Chairman John D. Dingell, D-Mich., spoke Wednesday of resurrecting patients' bill-of-rights legislation giving consumers expanded rights to sue HMOs—others are virtually must-pass measures that Democrats may be able to mold to their liking.
Vaughan said, for example, that reauthorization of legislation next year to charge drug companies user fees to review their marketing applications might allow Democrats to toughen Food and Drug Administration (FDA) oversight of the safety of prescription drugs after they are on the market.
And similar legislation to renew user fees for medical devices might provide a legislative vehicle for tougher post-marketing oversight of medical device hazards; although Stephen J. Ubl, chief executive officer of the Advanced Medical Technology Association, said Wednesday that FDA has broader authority to address those hazards in the device area than the agency does in the drug arena.
Democrats hope that hearings focusing attention on issues such as the nation's growing uninsured population and Medicare authority to negotiate directly with drug makers over Medicare reimbursement levels eventually will lead to legislation that would actually be signed into law—perhaps after 2008 by a Democratic president.
Charles B. Rangel, the New York Democrat who is expected to chair the House Ways and Means Committee, said Wednesday that since it began to appear that Democrats would regain control of the House, "I can't begin to tell you the number of pharmaceuticals and private hospital organizations that have come to me and my staff saying they would want to work with us as we put together a plan to cover those 47 million [uninsured] people who are out there."
Rangel added that "a lot of corporate people are concerned" about the uninsured as well. "Because they are compassionate? Hell no. But because they are paying for the insurance of these people directly. These people are getting health care. They're just not paying for it. The people paying for it are paying for them as well."
Vaughan, a former Ways and Means Democratic staff aide, noted the potential for extensive hearings on the uninsured. That, combined with the possibility Massachusetts Gov. Mitt Romney will pursue the GOP presidential nomination in 2008 based on his state's pace-setting health coverage plan, could create a dynamic that makes universal coverage a top issue in the election—as Democratic candidates seek to outdo Romney.
Democratic pollster Celinda Lake made a similar assessment in an appearance before an AARP-sponsored forum Wednesday, predicting that 2008 will be the "the health care election."
While universal coverage might seem like a pipe dream, Democrats and their allies giddy over the midterm election results see a chance of covering more of the nation's uninsured children through reauthorization next year of the State Children's Health Insurance Program (SCHIP).
The election results provide a "tremendous boost" for children's coverage, claimed Ron Pollack, executive director of the liberal advocacy group Families USA. "SCHIP no doubt will be reauthorized. However, since approximately nine million children continue to be uninsured, the real question before the Congress is whether the reauthorization process will expand health care coverage and provide adequate SCHIP funding for those children who don't have coverage and whose families can't afford it," Pollack said. "A simple reauthorization will be a major disappointment."
But the budget realities Congress faces are harsh and will be made even more so by California Democrat Nancy Pelosi's intention as Speaker of the House to follow "pay-as-you-go" rules in crafting legislative proposals.
"It affects everyone," Rick Pollack, executive vice president of the American Hospital Association (AHA), said. Thus if Congress takes up measures next year to extend popular tax breaks, the health care industry is a potential target for reimbursement cuts. "If you're going to spend money, you've got to cut somewhere," he said of pay-as-you-go budget discipline.
Adding to the potential reimbursement pressure is the likelihood that the Bush administration will propose cuts in Medicare payments to hospitals next year. Both Rick Pollack and Ubl expect the White House to propose those cuts, but that doesn't mean they think cuts will occur even though the "off year" after an election is normally the time to pursue reductions.
That's because campaigning for the presidency is expected to begin soon in earnest and neither party in Congress may be willing to take on cuts, Pollack and Ubl suggested. "I'm not sure I'd want to tackle the hospital lobby right out of the gate," Ubl said.
At the same time, however, AHA's Pollack noted that if both the House and the Senate come under Democratic control, "there would be a lot more pressure to reach agreement on a budget resolution." That in turn would lead to "reconciliation" provisions enforcing cost reduction to meet spending targets, he said. That in turn could create pressure to reduce hospital reimbursement, including payments for use of medical technology.
But the new Congress is likely to be unfriendly terrain for expansion of health savings accounts, a centerpiece of Bush administration efforts to make consumers more sensitive to the price and quality of health care. That could protect hospitals from a big ramp-up in pressure from Capitol Hill to post prices on their health care services.
AHA's Pollack expects lawmakers to continue to pursue "payment-for-performance" provisions in Medicare as a way to boost the value of health care spending. "The issue will continue to mature," he said. But "the Democrats will move a little more cautiously."
He said he expects the Bush administration to soon issue Medicaid regulations that would trim $12.5 billion in spending over 10 years. But he said he's hopeful that Democrats will block those cuts. Democrats in the past have sought to block similar Medicaid regulations on the grounds that they harm safety net providers.
Families USA's Pollack asserted that the outlook for Medicaid cuts has changed. "Major changes in the safety net Medicaid program, which would result in cutbacks in eligibility, benefits, and cost-sharing to low-income seniors, children, and families are unlikely to be adopted," he said "Last year's Medicaid cutbacks were adopted by a 50–50 vote in the Senate, and any such cutbacks are unlikely to receive favorable consideration now."
To the extent that cuts are in the offing, managed care plans in the Medicare Advantage program seem like a natural target given Democratic complaints about the Medicare overhaul law's payment provisions for that sector of health care.
"There is strong evidence now there is very, very large overpayment to the insurance companies," Dingell said in an afternoon press briefing. The Medicare overhaul law "was largely constructed so as to do that. And if the overpayments are as large as they appear to be, it may well be able to fill the doughnut hole," he said, referring to the gap in Medicare drug coverage in which beneficiaries pick up all of their drug costs.
Ubl opined that a $10 billion "stabilization fund" in the Medicare law also could be a target to pay for a Medicare physician payment measure that blocks a scheduled 5 percent cut in Medicare reimbursement.
But health plans say the plans have developed strong political backing as their benefits have expanded. "We have a great track record here," said Karen Ignagni, president of America's Health Insurance Plans. "We have demonstrated savings, we have demonstrated expansions, and we have a number of constituents of key members of Congress who are depending on these choices." Ignagni added, "There is a reality here that a number of core constituents for Democrats are depending on these programs and I think people are going to take account of that."
Jack Ericksen, vice president for federal relations at the Blue Cross-Blue Shield Association, said the stabilization fund should not be a target. "It was really put there to encourage Medicare Advantage to go into hard-to-serve areas, low-income areas, places where it's hard to put together networks and get plans to participate," Ericksen said. "It's not just like it's free money sitting out there."
Blue Cross-Blue Shield plans add that the new Congress likely will lessen the threat they say they faced in the current GOP-run Congress from enactment of legislation promoting association health plans. "We were concerned about that bill because we saw that it would really hurt" small employers, said Alissa Fox, association vice president of legislative and regulatory policy. "We're not sure that will be a priority in this Congress."
But drug company profits in Medicare and pricing practices by Medicare drug plans are likely to be ripe targets for oversight hearings. Dingell is a Capitol Hill legend for the toughness of his oversight hearings in the 1980s, and Michigan Democrat Bart Stupak, a passionate skeptic when it comes to the drug industry, could play a key oversight role on the Energy and Commerce Committee.
Another tough overseer of the health care industry looms large in coming hearings. Although California Democrat Henry Waxman won't be chairing the Energy and Commerce Health Subcommittee the way he did in the 1980s, Waxman is expected to delve deeply into health care issues as chairman of the House Committee on Government Reform.
Drug companies may be among the biggest targets in Democratic crosshairs, but they point out that the Medicare drug benefit is proving to be generally popular among seniors. "Today, 90 percent of the Medicare population has comprehensive drug coverage, and they are saving an average of $1,200 a year," said Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America. "Clearly, the new program is working very well and exceeding expectations."
Democrats, meanwhile, will face pressure of their own to deliver solutions to the American people for rising health care costs and the medical advances they say will come from research on human embryonic stem cells.
While they may be able to increase marketing of generic drugs through steps such as boosting funding for FDA processing of generic drug applications, legislation to allow importation of low-cost drugs from abroad won't be easy to pass. And getting legislation through Congress creating a regulatory process for approval of generic versions of expensive biotech products will involve tricky negotiations with the biotech industry and its allies in Congress and the White House.
And while health savings accounts may be anathema to many Democrats, they have proved to be popular among the many consumers who face limited options in trying to find some form of insurance protection at relatively affordable premium rates.
Democrats also now have sitting in their laps the messy problem of erasing the scheduled 5 percent cut in Medicare payments to doctors that starts January 1. Although bets are now widespread that lawmakers will put off dealing with the issue until next year, Rangel, the expected chair of Ways and Means, said he'd like to see the matter dealt with this year. "The doctors are catching hell, and I think we would like to help them," he said Wednesday. But in a statement he may find himself making on a variety of issues in coming months, he said, "I don't know where we would get the money."
AMA Board Chairman Cecil Wilson reiterated Wednesday that 80 senators have signed a letter urging GOP leaders to fix the payment shortfall before adjourning for the year.
"I think it's a fair observation to say that lame-duck sessions in general are challenges in getting things done. We understand there are challenges, but there are majorities in the Congress that understand the problem," Wilson said.
Delivering on stem cell legislation also will be difficult. Even with Democratic gains, veto-proof majorities favoring human embryonic stem cell legislation won't exist in the new Congress, said Elizabeth Wenk, deputy chief of staff to Delaware Republican Michael N. Castle, a leader in the battle to get such legislation through Congress before it was vetoed earlier this year.
But Castle isn't sticking to his pre-election assessment that passage of legislation won't happen until there is a new occupant of the White House, she said. "The political situation is different" now, she said. House and potentially Senate leaders now can be expected to bring up the legislation next year and supporters of such legislation will have the power at least in the House to add it as an amendment to other must-pass legislation, she noted.