Lawmakers Call Bush’s Medicare Reform Proposal Too Small, Likely to Offer Alternate Plans, CQ’s Goldreich Reports

Democrats and Republicans alike say that President Bush's proposed 10-year, $190 billion budget allocation for Medicare reform is too small, and several lawmakers are expected to offer competing plans to spend at least $300 billion, Congressional Quarterly senior reporter Samuel Goldreich says in this week's " Congressional Quarterly Audio Report." House Ways and Means Chair Bill Thomas (R-Calif.) has sent the administration a letter asking how it "intends to make up a shortfall of well over $100 billion in the next 10 years" without cutting payments to providers (Goldreich, "Congressional Quarterly Audio Report," 2/19). Bush's budget, based on HHS projections, assumes Medicare spending will grow 73% in the next 10 years to $3 trillion. The Congressional Budget Office, however, estimates that Medicare spending will double in the next decade to $3.3 trillion. HHS Secretary Tommy Thompson said last week that the CBO did not factor in prospective payment cuts for physicians (Kaiser Daily Health Policy Report, 2/15). The administration is "not budging" in response to Thomas' letter, saying Congress will have to decide how to allocate payments under budget-neutrality requirements built into Bush's plan, which require any increased payments to providers to be offset by decreases elsewhere in Medicare spending. Goldreich predicts the administration's stance will set off a "fierce lobbying campaign" among provider groups. In addition, Goldreich expects several lawmakers -- including Thomas, Sen. Charles Grassley (R-Iowa) and Sen. John Rockefeller (D-W.Va.) -- to introduce other options for Medicare reform in the coming weeks.

No Action Ahead on Uninsured
On the uninsured front, Congress is unlikely to act on either Bush's $89 billion tax credit proposal or the issue more generally as lawmakers reach "another standoff" on economic stimulus, Goldreich says. The Senate recently passed a simple extension of unemployment benefits, dropping proposals contained in previous stimulus bills to help the unemployed purchase health insurance through tax credits or COBRA subsidies. The House, however, has again passed a "full-blown stimulus bill" that contains both tax credit provisions and a plan to "pump in more than $4 billion in state grants" to help the uninsured pay health coverage premiums. The standoff will likely hinder a larger congressional debate over the uninsured, with Democrats and Republicans "no closer to a compromise" on whether tax credits or increased funding for Medicaid and CHIP would more effectively address the problem, Goldreich says. Similar disagreements will limit the influence of a coalition of insurer, consumer, labor, employer and health groups that last week launched an advertising campaign calling for action on the uninsured, Goldreich predicts, noting that the "various groups can't agree on a single bill to resolve the debate over tax credits and public health."

AIDS Funding
Goldreich also examines charges that the Bush administration has "shortchanged" the international fight against AIDS by contributing only $200 million this year to the Global Fund to Fight AIDS, Tuberculosis and Malaria. United Nations Secretary-General Kofi Annan, who launched the fund and has projected it will need $7 billion to $10 billion to be effective, last week lobbied Bush and members of Congress for increased contributions. Although Congress last year authorized spending $1.4 billion on various international AIDS efforts, appropriators agreed to allocate only $675 million. While Goldreich notes there is "certainly substantial bipartisan support" to increase U.S. contributions to the global AIDS fund, White House officials are "already putting out the word they think $200 million is pretty generous, given budget needs to fight the war on terrorism." Goldreich's full report is available online ("Congressional Quarterly Audio Report," 2/19).