SAMHSA222s Weekly Financing News Pulse: National Edition January 29, 2010 1/29/10 1 SAMHSA222s Weekly Financing News Pulse: National Edition National News Obama Administration Releases Rules Governing Behavioral Health Parity Legislation Large Democratic Health Care Reform Bills Stall; House to Move Smaller Bills in February MACPAC Commission to Review Effects of Medicaid and CHIP Payments Rep. Ryan Introduces Modified 223Roadmap for America222s Future Act224 Senate Rejects Deficit Commission, President Obama to Create One by Executive Order President Obama Proposes Spending Freeze in 2011, HHS to be Affected Polls Find Americans Growing More Skeptical Health Care Reform, Respond More Favorably After Education Studies Released CBO Finds ARRA Medicaid Subsidies Costs Less Than Anticipated; Medicare Costs to Increase Over Next Decade CBO Finds Senate Health Care Bill Would Extend Medicare Hospital Trust Fund Solvency Health Affairs Study Finds Workplace Wellness Programs Generate Savings Commonwealth Fund Finds CBO Historically Underestimates Health Reform Savings NEJM Study Finds Increasing Copayments May Adversely Affect Outcomes, Increase Spending Among Elderly RWJF Examines Dependent Coverage Expansions, Implications for National Legislation Around the Hill: Hearings on Health Financing To Subscribe to SAMHSA222s Weekly Financing News Pulse, please go to the following link and choose 223Health Care Financing224: https://service.govdelivery.com/service/multi_subscr ibe.html?code=USSAMHSA&origin=http://www.samhsa.go v/enetwork/success.aspx For questions or comments, please contact Kevin Hennessy ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: National Edition January 29, 2010 1/29/10 2 National News Obama Administration Releases Rules Governing Behavioral Health Parity Legislation: On January 29, the U.S. Departments of Health and Human Services (HHS), Labor (DOL), and the Treasury jointly issued interim final rules governing the implementation of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The new rules are still open to comment until May 3 and take effect for plan years beginning on or after July 1, 2010 ( SAMHS A, 1/29 ). The National Council for Community Behavioral Healthcare published a MHPAEA factsheet detailing the interim final rules. Large Democratic Health Care Reform Bills Stall; House to Move Smaller Bills in February: On January 28, House Speaker Nancy Pelosi (D CA) announced that the House will bring small scale health care reform legislation to the floor before recessing on February 11. Rep. Pelosi stressed that the smaller legislation will not replace the broader Democratic health care reform bills ( HR 3590 , HR 3962 ) but will quickly advance smaller reforms capable of achieving bipartisan support in Congress ( CQ Politics, 1/28 ; Kaiser Health News, 1/28 ). Meanwhile, in President Barack Obama222s State of the Union address on January 27, he urged Congress not to give up on health care reform legislation but dictated no specific legislative tactics ( Kaiser Health News, 1/28 ). Congressional Democratic leaders also reaffirmed their commitment to passing broad health reform legislation but have not yet determined how to proceed after losing their 60 vote supermajority in the Senate ( New York Times, 1/28 ). Rep. Pelosi said that she cannot muster the votes for the simplest solution, approving the Senate bill unaltered in the House, leaving a number of options on the table, including utilizing the budget reconciliation process ( Kaiser Health News, 1/27 ). While the Democrats regroup, Rep. Michele Bachmann (R MN) released the GOP222s Declaration of Health Care Independence , outlining the Republican222s criticism of Democratic health care reform and clarifying broad GOP health care reform goals ( Kaiser Health News, 1/26 ). Finally, in related news, the House Energy and Commerce Committee Chair Henry Waxman (D CA) has agreed to help House Republicans obtain limited information regarding the Obama Administration222s health care industry deals. However, Rep. Waxman will not help the GOP obtain communications between the President, his top aides, and health industry leaders as Republicans initially requested ( Kaiser Health News, 1/28 ; Kaiser Health News, 1/26 ). MACPAC Commission to Review Effects of Medicaid and CHIP Payments: Created by the Children222s Health Insurance Program Reauthorization Act (CHIPA) in 2009, a new Medicaid and CHIP Payment Access Commission (MACPAC) will review the effects of Medicaid and Children222s Health Insurance Program (CHIP) reimbursements on access to care. MACPAC will also examine the effects of Medicaid and CHIP policies on the broader health system and make recommendations to Congress about both programs. The U.S. Comptroller General appointed MACPAC222s 17 members on December 23, including the chair, Kaiser Commission on Medicaid and the Uninsured Director Diane Rowland ; however, MACPAC does not yet have federal funding to carry out its objective.The Democratic national health care reform bills ( HR 3590 , HR 3962 ) would provide $11 million for MACPAC to hire the staff necessary to execute its mission ( Kaiser Health News, 1/25 ; American Medical News, 1/25 ). Rep. Ryan Introduces Modified 223Roadmap for America222s Future Act224: On January 27, Rep. Paul Ryan (R WI) re introduced a modified version of the Roadmap for America222s Future Act ( HR 4529 ), which would reform health care, Social Security, the tax code, job training, and the budget process in an effort to reduce government expansion and debt. The legislation would provide a health insurance tax credit and allow individuals to keep their insurance when they move or change jobs. The legislation SAMHSA222s Weekly Financing News Pulse: National Edition January 29, 2010 1/29/10 3 would also dramatically alter Medicaid, allowing Medicaid recipients to utilize the same private vouchers available to other Americans. The bill would make similarly large changes to Medicare, gradually transitioning the program to provide vouchers for private coverage while increasing the retirement age from 65 to 69 over time. The Congressional Budget Office (CBO) released an analysis of stylized versions of the legislation222s proposals, finding that non interest federal outlays would decline from 26 percent of the GDP to 10 percent of the GDP between 2009 and 2020, further dropping to 14 percent of the GDP by 2080 ( Daily Caller, 1/27 ; CBO, 1/27 ; THOMAS ). Senate Re jects Deficit Commission, President Obama to Create Oneby Executive Order: On January 26, the Senate rejected a proposal to establish a commission empowered to make significant changes to reduce the deficit. The deficit reduction commission would issue binding recommendations to Congress on policies affecting Medicare, Medicaid, the tax code, and Social Security. In his State of the Union Address, President Obama urged the Senate to reconsider; also vowing to create the commission by executive order should Congress fail to approve it. However, critics note that a presidentially appointed commission would lack the binding effect of a congressional commission ( Los Angeles Times, 1/27 ; CBS, 1/26 ; Washington Post, 1/20 ). P resident Obama Proposes Spending Freeze in 2011, HHS to be Affected: President Obama announced that he will include a three year freeze on domestic discretionary spending in the FY2011 budget that he will submit to Congress February 1. The freeze, which would not affect Medicare or Medicaid spending, would affect roughly 17 percent of the federal budget. Administration officials noted that they will not enforce the freeze acrossthe board. Some programs will see spending cuts while others will see increases, producing a net spending freeze. Officials identified the HHS as one of several departments likely to sustain spending cuts ( Wall Street Journal, 1/26 ; Reuters, 1/29 ). Pol ls Find Americans Growing More Skeptical Health Care Reform, Respond More Favorably After Education: A CNN/Opinion Research poll conducted January 22 to 24 found that only 30 percent of respondents want Congress to pass final health care reform legislation similar to the bills already passed by the House and Senate ( HR 3962 , HR 3590 ). The poll also found 48 percent of respondents want lawmakers to start on an entirely new health reform bill while 21 percent think Congress should stop working on all health reform legislation ( Kaiser Health News, 1/27 ). Meanwhile the Kaiser Family Foundation222s (KFF) January health tracking poll , conducted January 7 to 12, found that 42 percent of respondents support health care reform while 41 percent oppose it. However, the KFF poll also found that many Americans remain unfamiliar with key elements of the major bills and that majorities reported more favorable views after learning about the legislation222s key elements ( KFF, 1/22 ; New York Times, 1/22 ). Studies Released CBO Finds ARRA Medicaid Subsidies Costs Less Than Anticipated; Medicare Costs to Increase Over Next Decade: A Congressional Budget Office (CBO) report examining the budget outlook for FY2010 through FY2020 finds that Medicare costs will increase from $528 billion this year to over $1 trillion by 2020, even if the program implements the scheduled 21 percent physician reimbursement reduction in March. Released on January 26, the report also finds that the American Recovery and Reinvestment Act (ARRA) will cost $75 billion more than the estimated $787 billion, though the ARRA222s Federal Medical Assistance Percentage (FMAP) increases will cost $3 billion less than originally projected ( Kaiser Health News, 1/27 ; CNN, 1/26 ; Wall Street Journal, 1/26 ; AP via ABC News, 1/26 ). SAMHSA222s Weekly Financing News Pulse: National Edition January 29, 2010 1/29/10 4 CBO Finds Senate Health Care Bill Would Extend Medicare Hospital Trust Fund Solvency: An updated CBO analysis found that the Senate222s health care reform bill, the Patient Protection and Affordable Care Act ( HR 3590 ), would extend the solvency of the Medicare Hospital Insurance (HI) trust fund that pays for Medicare Part A benefits. The CBO found that the bill would reduce net fund outlays by $245 billion between 2010 and 2019 and generate $113 billion through increased HI payroll taxes over the same period, adding $358 billion to the fund over ten years. The CBO further estimates that the changes will leave a positive balance of $170 billion in the fund at the end of FY2019. Without the bill, the CBO projects the fund will be insolvent by FY2017 ( Health Leaders Media, 1/26 ). Health AffairsStudy Finds Workplace Wellness Programs Generate Savings: A meta analysis of the literature on costs and savings associated with workplace wellness programs found that medical costs fall by $3.27 for every dollar spent on wellness programs and absenteeism costs fall by $2.73 per dollar spent. The study , published in Health Affairs, notes that additional research is needed to better understand the mechanisms at work and their broader applicability; however, the authors conclude that increased use of employer wellness programs may reduce cost and improve outcomes ( Kaiser Health News, 1/22 ). Commonwealth Fund Finds CBO Historically Underestimates Health Reform Savings: Examining major health reform legislation enacted over the past 30 years, a Commonwealth Fund analysis finds that the CBO substantially underestimates the savings from reform measures. The authors note that, because the CBO requires substantial historical precedent for its claims, the agency has difficulty addressing the effects of measures like comprehensive health care reform that enact multiple, largely unprecedented, changes simultaneously. Commonwealth222s analysis included prospective payment reforms for hospitals in the 1980s, the Balanced Budget Act from the 1990s, and the Medicare Modernization Act of 2003 (MMA) ( Commonwealth, 1/20 ; Kaiser Health News, 1/22 ). NEJM Study Finds Increasing CopaymentsMay Adversely Affect Outcomes, Increase Spending Among Elderly: A New England Journal of Medicine (NEJM) study examined numerous Medicare plans between 2001 and 2006, finding that those that increased seniors222 copayments for ambulatory care had reduced outpatient utilization, increased inpatient utilization, and increased hospital admissions. The authors conclude that raising cost sharing for ambulatory services may adversely affect patient care and increase total spending as utilization of more cost services increases ( Kaiser Health News, 1/28 ; NEJM). RWJF Examines Dependent Coverage Expansions, Implications for National Legislation: Funded by the Robert Wood Johnson Foundation (RWJF), the State Health Access Reform Evaluation (SHARE) analyzed laws in 38 states which mandate that adults in their mid or late twenties receive health coverage as dependents through their parents222 plans. The report provides federal policy makers with data on which to base potential national policy aimed at reducing the 29 percent uninsurance rate among adults ages 1929. However, preliminary findings indicate that state laws have had no net effect on coverage rates. The report also provides data on the structure of individual state laws ( RWJF, 1/15 ; Kaiser Health News, 1/22 ). SAMHSA222s Weekly Financing News Pulse: National Edition January 29, 2010 1/29/10 5 Around the Hill: Hearings on Health FinancingSenate HELP Committee : HELP Nominations Vote January 27, TBD, TBD House Veterans222 Affairs Committee : Health Care Needs of Rural Veterans January 27, 10:00 a.m., 345 Cannon House Energy and Commerce Committee: Request for Health Care Revision Documents from the Executive Branch January 27, 2:00 p.m., 2123 Rayburn House Budget Committee : Fiscal 2011 Budget February 2, 2:00 p.m., 210 Cannon House Veterans222 Affairs Subcommittee on Health: Project Hero February 3, 10:00 a.m., 334 Cannon House Veterans222 Affairs Subcommittee on Disability Assistance and Memorial Affairs: Veterans222 Benefits Improvement Act February 3, 2:00 p.m., 334 Cannon House Veterans Affairs Committee : Fiscal 2011 and 2012 Budget: VA February 4, 10:00 a.m., 334 Cannon