Obama Defends Proposed Health Office

[clear eye]

Source: NY Times

In draft legislation sent to Congress on July 17, the president proposed creation of an “independent Medicare advisory council,” which could set payment policies for Medicare, subject to approval by the president. The administration could put the policies into effect unless they were blocked within 30 days by Congress.


...Influential House Democrats oppose Mr. Obama’s call for a Medicare council. Representatives Charles B. Rangel of New York, chairman of the Ways and Means Committee, and Pete Stark of California, chairman of the panel’s health subcommittee, say Congress has a duty to set Medicare payment policy. And they worry that a future Republican president could use the council as a tool to make deep, damaging cuts in Medicare.



Read more: http://www.nytimes.com/2009/07/26/us/26radio.html

---

Although the thrust of the NY Times article is the Congressional Budget Office's report that the proposed Executive Branch "Council" would not create enough or even any savings, DUers should be aware that if passed, the proposal gives any administration enough power to gut Medicare. The draft gives the "Council" regulatory authority over anything that could be called "cost-cutting", not only payment rates.

According to the letter accompanying the draft sent by Peter Orzag to Pelosi, it appears that Orzag drafted the Act and Pres. Obama "expressed his openness" to it. Under it, both Houses of Congress cede all authority to regulate Medicare to an Executive Branch "Council" of members appointed by the President and confirmed by the Senate with undefined, therefore unlimited powers over Medicare. It doesn't say whether the members can be dismissed by the President, or whether they remain as long as the President is in office unless they step down. The members of the Council would only have to be considered health care experts, which would allow stacking it with members of the private health insurance industry and pharmaceutical industry or other opponents of the current Medicare, if an Administration wished.

Medicare has remained the relatively complete, effective program for all retired people that it has, because it is so popular that elected members of Congress don't dare slash it. If this bill becomes law, Congress could reasonably say to distraught retirees that the cuts were out of their hands, and that it was the doing of this Council which they couldn't control.

According to Medicare Update, the way it would work is that every year on Dec. 1st (except for a few matters that follow the fiscal year), the "Council" would present its changes to Medicare to the President and Congress. Neither the President nor Congress would be able to amend the proposals or accept some and reject others. The measures would become official regulations unless a)the President vetoed the entire package w/i 30 days, or Congress dropped everything else it was doing over the holidays and both Houses passed a joint Resolution rejecting the package by Dec. 30th.

The draft even rejects judicial recourse:

"...a person adversely affected by the Council's approved recommendations would have to file an action in the U.S. Court of Appeals for the District of Columbia within 30 days of the President's approval.

However, the scope of the review would be limited to whether the Council's recommendation exceeded the scope of the Council's authority for determining annual payment updates or making reforms. No other judicial review of the recommendations of the Council, or of the President's approval or disapproval of recommendations, would be available."

As the Act doesn't limit the Council's authority other than to say that the measures have to have been made to cut costs, it's hard to see how any suit could succeed. Also the majority of people affected by a measure will not be aware of it until after the 30 days.

Some of the potential "cost-saving" measures that could conceivably be enacted by the Council:

1) The addition of means-testing, so that only people below a certain income threshold could be covered, forcing the rest into private plans.
2) Combining it with Medicaid with Medicaid's limited providers, clinics, long waits, and substandard facilities.
3) Draconian cuts of covered procedures, so that Medigap policies would have to become virtually complete catastrophic health insurance policies. Working class people who paid a lifetime into Medicare and couldn't afford enough add'l coverage would be given only palliative care if Medicare no longer covered the needed treatment.

Part of Orzag's motive for the creation of this formula might be to make Medicare as reviled as any dysfunctional welfare program can get, instead of the model for single-payer it now is. When all gov't financed health plans become disasters it would be exceedingly hard to sell single-payer to the public.

As far as I know, the Orzag's draft legislation is not yet a bill in the House, but something very similar has been proposed by Sen. Rockefeller and co-sponsored by Sen. Whitehouse entitled S.1110, and is in the Senate Finance Committee. Please, please call your members of Congress today to say you oppose Congress turning over the authority to regulate Medicare to an unaccountable outside agency.

[clear eye]

1. It is going before the Health Subcommittee of the House Ways & Means Committee

according to what I've heard.

[JDPriestly]

2. The House bill already has a commission in it. I would guess that Orzag's proposal

is the hidden payoff for the insurance companies. The president just puts the insurance company lobbyists on the president's commission and voila no public option. Disappeared with the president's fairy dust.

For comparison here is the link to H.R. 676 the single payer option plan: http://www.hr676.org/

Here is the proposal in H.R. 3200, America's Affordable Health Choices Act

(a) ESTABLISHMENT.—
13 (1) IN GENERAL.—There is established a pri14
vate-public advisory committee which shall be a
15 panel of medical and other experts to be known as
16 the Health Benefits Advisory Committee to rec17
ommend covered benefits and essential, enhanced,
18 and premium plans.
19 (2) CHAIR.—The Surgeon General shall be a
20 member and the chair of the Health Benefits Advi21
sory Committee.
22 (3) MEMBERSHIP.—The Health Benefits Advi23
sory Committee shall be composed of the following
24 members, in addition to the Surgeon General:
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f:\VHLC\071409\071409.140.xml (444390|2)
31
1 (A) 9 members who are not Federal em2
ployees or officers and who are appointed by
3 the President.
4 (B) 9 members who are not Federal em5
ployees or officers and who are appointed by
6 the Comptroller General of the United States in
7 a manner similar to the manner in which the
8 Comptroller General appoints members to the
9 Medicare Payment Advisory Commission under
10 section 1805(c) of the Social Security Act.
11 (C) Such even number of members (not to
12 exceed 8) who are Federal employees and offi13
cers, as the President may appoint.
14 Such initial appointments shall be made not later
15 than 60 days after the date of the enactment of this
16 Act.
17 (4) TERMS.—Each member of the Health Bene18
fits Advisory Committee shall serve a 3-year term on
19 the Committee, except that the terms of the initial
20 members shall be adjusted in order to provide for a
21 staggered term of appointment for all such mem22
bers.
23 (5) PARTICIPATION.—The membership of the
24 Health Benefits Advisory Committee shall at least
25 reflect providers, consumer representatives, employ-
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32
1 ers, labor, health insurance issuers, experts in health
2 care financing and delivery, experts in racial and
3 ethnic disparities, experts in care for those with dis4
abilities, representatives of relevant governmental
5 agencies. and at least one practicing physician or
6 other health professional and an expert on children’s
7 health and shall represent a balance among various
8 sectors of the health care system so that no single
9 sector unduly influences the recommendations of
10 such Committee.
11 (b) DUTIES.—
12 (1) RECOMMENDATIONS ON BENEFIT STAND13
ARDS.—The Health Benefits Advisory Committee
14 shall recommend to the Secretary of Health and
15 Human Services (in this subtitle referred to as the
16 ‘‘Secretary’’) benefit standards (as defined in para17
graph (4)), and periodic updates to such standards.
18 In developing such recommendations, the Committee
19 shall take into account innovation in health care and
20 consider how such standards could reduce health dis21
parities.
22 (2) DEADLINE.—The Health Benefits Advisory
23 Committee shall recommend initial benefit standards
24 to the Secretary not later than 1 year after the date
25 of the enactment of this Act.
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33
1 (3) PUBLIC INPUT.—The Health Benefits Advi2
sory Committee shall allow for public input as a part
3 of developing recommendations under this sub4
section.
5 (4) BENEFIT STANDARDS DEFINED.—In this
6 subtitle, the term ‘‘benefit standards’’ means stand7
ards respecting—
8 (A) the essential benefits package de9
scribed in section 122, including categories of
10 covered treatments, items and services within
11 benefit classes, and cost-sharing; and
12 (B) the cost-sharing levels for enhanced
13 plans and premium plans (as provided under
14 section 203(c)) consistent with paragraph (5).
15 (5) LEVELS OF COST-SHARING FOR ENHANCED
16 AND PREMIUM PLANS.—
17 (A) ENHANCED PLAN.—The level of cost18
sharing for enhanced plans shall be designed so
19 that such plans have benefits that are actuari20
ally equivalent to approximately 85 percent of
21 the actuarial value of the benefits provided
22 under the reference benefits package described
23 in section 122(c)(3)(B).
24 (B) PREMIUM PLAN.—The level of cost25
sharing for premium plans shall be designed so
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34
1 that such plans have benefits that are actuari2
ally equivalent to approximately 95 percent of
3 the actuarial value of the benefits provided
4 under the reference benefits package described
5 in section 122(c)(3)(B).
6 (c) OPERATIONS.—
7 (1) PER DIEM PAY.—Each member of the
8 Health Benefits Advisory Committee shall receive
9 travel expenses, including per diem in accordance
10 with applicable provisions under subchapter I of
11 chapter 57 of title 5, United States Code, and shall
12 otherwise serve without additional pay.
13 (2) MEMBERS NOT TREATED AS FEDERAL EM14
PLOYEES.—Members of the Health Benefits Advi15
sory Committee shall not be considered employees of
16 the Federal government solely by reason of any serv17
ice on the Committee.
18 (3) APPLICATION OF FACA.—The Federal Advi19
sory Committee Act (5 U.S.C. App.), other than sec20
tion 14, shall apply to the Health Benefits Advisory
21 Committee.
22 (d) PUBLICATION.—The Secretary shall provide for
23 publication in the Federal Register and the posting on the
24 Internet website of the Department of Health and Human
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f:\VHLC\071409\071409.140.xml (444390|2)
35
1 Services of all recommendations made by the Health Ben2
efits Advisory Committee under this section.
3

http://waysandmeans.house.gov/media/pdf/111/AAHCA09001xml.pdf

More at that web address

[JDPriestly]

3. I sent this e-mail to the president today

President Obama,

Your office represented by Peter Orszag has proposed a commission to decide on health care policy that would be entirely appointed by the executive branch. That looks like a power grab by your office. And in the future, an irresponsible president could use that power as President Bush used so much of his power, to promote the interests of his donors and friends.

This is what happened in the aftermath of Katrina. Money that should have been spent to help people who were devastated by the hurricane was given to President Bush's campaign supporters in the faith-based community. Don't allow future presidents to turn healthcare into a Katrina catastrophe.

I have read H.R. 676, and relevant portions of H.R. 3200 . I prefer H.R. 676 by far, but H.R. 3200 is acceptable. It is unnecessary to continue to bargain with insurance companies. H.R. 676 pretty much cuts them out of the picture but allows non-profit healthcare management. That's simple and will save the most in costs. It will also permit the fairest allocation of health care resources.

H.R. 3200 is a compromise with the insurance companies and with those Americans who fear losing their current health care if their insurance company is cut out of the picture. H.R. 3200 provides for a review board on which some members are appointed by the president and others by the Comptroller General.

We have two good bills. Further negotiations are simply a way of killing healh care reform and discrediting your administration. Withdraw Mr. Orzag's proposal. Urge passage of H.R. 676 or H.R. 3200 and get to the work of creating jobs for Americans.

[clear eye]

5. Medicare gets minimal attention in HR 3200

The Independent Medicare Advisory Council Act of 2009 and its Senate counterpart S.1110, are in addition to H.R.3200 to allow
"cost-cutting" in Medicare alledgedly to offset the costs of H.R. 3200. Unfortunately that bill is like using a sledgehammer to push in a tack.

[JDPriestly]

7. I would like more specifics on just what they want to cut in Medicare costs.

Elderly people need a lot of health care. There really isn't much you can do about that. What sorts of care are people being given that isn't necessary? I think this may be one of those urban myths.

I remember when Schwarzenegger promised to balance the California budget by eliminating waste. Well, he got into office, guns blazing ready to torpedo all the waste -- and didn't find much if any. We see the result: California is bankrupt.

The best way to eliminate waste in the health care system is to get rid of the for profit insurance companies. Abolish them from the health care system.

[clear eye]

8. That's just the problem. It's impossible to know what they would cut.

I agree that the best solution is single-payer, which would put all, young and old, into one gov't-financed pool. There's so much misunderstanding out there that I have to keep repeating that the actual care would remain in private hands, and all citizens would have a choice of all appropriate doctors.

Failing that Medicare must remain under the control of Congress who know that destroying it would be political suicide.

I also agree that there is probably very little excess care given under Medicare. According to a large bunch of seniors I spoke with a while back, the greatest cause of excess expense in Medicare was fraud by MDs. Specifically, they consistently charged Medicare for processes they didn't perform. Since the AMA has successfully lobbied against a fraud enforcement division, nothing ever came of it when the seniors reported the excess charges to the Medicare administration as quite a few of them did.

[No Elephants]

10. I will bet you there is waste in the California system and I will also bet that a lot of the waste

will survive the budget cuts.

[robcon]

4. He seems to eager to appoint 'czars,' although in this case it's a committee.

The only 'czar' should be the Fed - the money supply and interest rates should not be in the hands of politicians, as every other industrialized country has found out.

[Proud Liberal Dem]

6. Isn't this what he was talking about in the press conference last week?

The one he said that the Repubs passed into law at some point?

[clear eye]

9. Can't be since it hasn't passed. n/t

[No Elephants]

11. The Constitution gives the power of the purse to Congress and only Congress. This is the

second grab at it that Obama has made in under six months, that I know of. The first attempt was when he claimed the right to spend on foreign relations without Congress's okay. Congress was not willing to go along with him on the first attempt, but they seem ready now.

IMO, if Congress goes along, it would be an unconstitutional delegation of power. Anyway, if they do this, they will get away with it because I can't think of anyone who would have standing to sue, under the standards set by the SCOTUS.

No biggie. no one seems to care about the Constitution anymore, anyway.