Senate debates health reform bill with 1-year Medicare pay patch

Washington -- Senators opened debate on national health system reform legislation on Nov. 30 in partisan fashion. Democrats talked up the bill's coverage expansions and health insurance reforms, and Republicans highlighted the measure's potential to increase both health insurance premiums and the federal deficit.

The bill aims to improve the affordability of health insurance and expand government regulation of health plans. It also would implement Medicare cuts to help pay for it.

The American Academy of Family Physicians does not officially support the bill, though it meets many AAFP principles. A coalition of 19 surgical societies issued a Dec. 1 statement opposing the Senate bill.

American Medical Association President J. James Rohack, MD, said the AMA is reserving its decision to support or oppose the bill until later in the process. "We anticipate a lengthy debate, multiple amendments and modifications of the bill during the floor debate, and we will work for changes in the Senate bill to improve the health system for patients and the physicians who care for them."

The AMA has several concerns about the bill, which were expressed in a Dec. 1 letter to Senate Majority Leader Harry Reid (D, Nev.) from AMA Executive Vice President and CEO Michael D. Maves, MD, MBA.

Foremost was apprehension about the bill's lack of a permanent Medicare pay solution. The Patient Protection and Affordable Care Act would increase physician Medicare pay by 0.5% in 2010 but allow a projected 23% cut to go through in 2011 under Medicare's sustainable growth rate formula, according to the Congressional Budget Office.

The measure also would require the federal government to develop a Medicare payment modifier by 2012 that would adjust rates based on the quality of care. But the basic components of such a value-based measurement are in their infancy, and Medicare lacks the resources to develop them, Dr. Maves stated.

The AMA also opposes a Senate provision to establish an Independent Medicare Advisory Board that would be charged with reducing program spending growth. Dr. Maves said physicians could be subject to pay cuts recommended by the board while other stakeholders initially would be exempt from such reductions. The CBO, however, predicted that any rate reductions would impact areas other than physician pay.

Also drawing opposition is a provision to impose a 5% tax on elective cosmetic surgeries and require physicians to collect it. The American Academy of Cosmetic Surgery is unified against the provision, said Steven Hopping, MD, immediate past president. "To ask us to be tax collectors is really unprecedented" and would pose an administrative burden, he said. Also, because 80% of the patients having cosmetic procedures are female, "this is a tax against women."

Senate leaders already have heeded some physician concerns about provisions in committee-passed measures. For instance, they abandoned a proposal to reduce Medicare pay by 5% for doctors deemed to have "high utilization" of services. The bill also reduced proposed Medicare enrollment fees for doctors, but the AMA wants that provision cut altogether.

Not all costs included

Senators opened debate -- expected to last weeks -- by offering dramatically different views of the bill's impact.

The CBO estimated on Nov. 18 that the measure would cost $848 billion but would reduce the federal deficit by $160 billion over the decade. Democrats said the bill would lower the number of uninsured to 24 million by 2019 -- 30 million fewer than expected under current law by that date -- and bolster public health.

But the CBO estimate tells only part of the story, Republicans said. Sen. John McCain (R, Ariz.) said the Senate bill would collect new taxes starting in 2010 but not offer health coverage expansions until 2014. Also, the bill does not include the 10-year, roughly $210 billion cost of repealing the SGR. Meanwhile, it would increase the federal commitment to health care by about $160 billion over a decade, the CBO estimated.

"This is Bernie Madoff accounting," McCain said. "It's a sham."

The Senate reforms would expand the principles of Massachusetts' health system overhaul nationwide. Most Americans would be required to have health insurance or pay penalties. Health plans could not deny or rescind coverage based on preexisting conditions or health status.

The measure also would enact state health insurance exchanges to expand coverage, although states could opt out of offering a public insurance option.

People earning from 133% to 400% of poverty would be eligible for premium subsidies, and those earning less than 133% of poverty would be eligible for Medicaid.

Senators hotly debated a Nov. 30 CBO report on the Senate bill's impact on insurance premiums.

The budget office concluded it would increase average per-person premiums for non-group plans by 10% to 13% by 2016. But the subsidies would reduce premiums for 57% of these enrollees to less than current costs.