Congressional Update

By: Mary Beth Stanton and John R. Russell IV

OVERVIEW

The 111th Congress took the oath of office on Tuesday, January 6. Congress faces immediate challenges addressing the economy and has already begun work on economic stimulus and health care legislation.

The first priority for Congress is to pass an economic stimulus package. President-elect Obama previously stated his desire to sign an economic stimulus bill into law on his first day in office --- January 20th. However, it now appears that the stimulus package will not be finalized until mid-February. Due to this delay, Democratic leaders have decided to move a reauthorization of the State Children's Health Insurance Program (SCHIP) “pre” economic stimulus. While current SCHIP funding does not expire until March 31, Democratic leaders see swift passage of a reauthorization bill as a priority. Passage of SCHIP reauthorization would enable Congress to focus on longer-term health care issues, such as the Medicare physician fee schedule and health care reform.

HOUSE

The House passed a 4.5 year reauthorization of the State Children's Health Insurance Program (SCHIP) by a 289-139 vote on January 14th. The Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA, or H.R. 2) extends SCHIP coverage to 4 million additional children and is funded primarily through an increase in federal tobacco taxes.

H.R. 2 contains a permanent moratorium on the creation or expansion of physician-owned specialty hospitals, effective January 1, 2009. H.R. 2 also contains a controversial provision which would allow States to waive the five-year waiting period for legal immigrant children and pregnant women.

SENATE

On January 11th, the Senate Health, Education, Labor, and Pensions (HELP) Committee held a nomination hearing with HHS Secretary nominee Daschle (D-SD), the former Senate Democratic Majority Leader. Daschle has also been tapped by President-elect Obama to head the White House Office of Health Reform. At the HELP Committee hearing, Daschle stated that the Obama Administration plans to work with Democrats and Republicans to enact health reform in 2009. Daschle will soon go before the Senate Finance Committee for a hearing and vote on his nomination, and then to the Senate floor. We expect that Daschle will be easily confirmed.

On January 14th, by a vote of 12 to 7, the Senate Finance Committee approved its version of the SCHIP reauthorization bill. The full Senate could begin debate on this bill as early as January 21st, and we continue to anticipate that this legislation will be fast-tracked so President-elect Obama can sign it into law as soon as possible.

While the committee defeated most of the amendments that were offered for consideration, it adopted several amendments including the following:

• a Grassley (R-IA) amendment that would require the GAO to conduct a study on the extent to which state payment rates to Medicaid health plans are actuarially sound;
  
  
• a Rockefeller (D-WV) amendment that would allow states to provide SCHIP and Medicaid coverage to legal immigrant children and pregnant women;
  
  
• a Snowe (R-ME) amendment that would establish a wrap-around dental benefit under SCHIP for children whose health insurance does not cover dental care, with the cost of this benefit offset by an increase in tobacco taxes;
  
  
• a Rockefeller/Grassley amendment that would create a Medicaid and CHIP Payment and Access Commission; and
  
  
• a Grassley amendment that calls for an annual report to Congress on the financial status, enrollment, and spending trends of the Medicaid program.

The Senate HELP Committee held a hearing on January 14th to examine the merits of including health information technology provisions in an economic stimulus bill. Sen. Barbara Mikulski (D-MD), who chaired the hearing, emphasized that Congress should proceed cautiously to ensure that any federal funds devoted to health information technology initiatives will be effective in enhancing quality of care and controlling costs. This hearing also included testimony from Jack Cochran, M.D., executive director of The Permanente Federation.

STIMULUS

The elements of Congress' economic recovery package are still being finalized, but current drafts include several provisions related to health care access and delivery. Congressional leaders are planning to finalize this legislation for the President's signature by mid-February.

Current provisions include:

• Medicaid Federal Medical Assistance Percentage (FMAP): The bill would provide $87 billion to the states in the form of a temporary increase in the Medicaid federal medical assistance percentage (FMAP). This increase would remain in effect through the end of fiscal year 2010.
  
  The federal government's share of a state's expenditures for Medicaid is called the federal medical assistance percentage (FMAP). The FMAP for each of the 50 states and the District of Columbia is determined annually. The recent fiscal crisis for states has focused attention on the impact of Medicaid spending on state budgets.
  
  With the downturn in the economy, state revenues are declining while demand for state social services is rising as people lose their jobs. Many states will have no choice but to cut spending or raise taxes in order to meet the need for services.
  
  A temporary increase in the federal medical assistance percentage (FMAP) would provide fiscal relief lessening the scope and depth of cuts to social service programs.
  
  
• COBRA Assistance for the Unemployed: The bill would provide $30.3 billion in premium assistance to support health insurance coverage for the unemployed, while also extending the period of COBRA coverage for older and tenured employees. Specifically, the bill would pay 65 percent of the premium for COBRA coverage for up to 12 months for eligible persons who have lost their jobs on or after September 1, 2008. In addition, employees older than age 55 and those who have worked for an employer for 10 or more years would be able to retain their COBRA coverage until they become Medicare-eligible or obtain coverage through another employer.
  
  
• Medicaid Coverage for the Unemployed: The bill would provide $8.6 billion to allow the states to receive 100 percent federal matching funds to provide optional state Medicaid coverage, through 2010, for certain individuals who are involuntarily unemployed. This new coverage option would apply to individuals (and their dependents) whose family income does not exceed a state-determined level (no higher than 200 percent of the federal poverty level) or who are receiving food stamps.
  
  
• Health Information Technology: The bill would provide $20 billion to support the adoption of health information technology. It also would establish new privacy protections and standards for the electronic exchange of health information, although details have not been released on these provisions.
  
  
• Prevention and Wellness Fund: The bill would provide $3 billion for initiatives to combat preventable chronic diseases, the leading cause of deaths, and infectious diseases.

Numerous other health care priorities would receive varying levels of additional federal funding under this bill including: $1.5 billion for community health centers; $600 million for training primary care providers; $550 million for modernizing facilities and upgrading technology in the Indian Health Service; and $3.75 billion for construction of DOD medical facilities.