September 26, 2009 Legislation




The Baucus bill has the cost of healthcare reform down to only $775 Billion.  (I can't believe I just wrote that.  Ev Dirkson would roll over in his grave.)  This would cover 94% of the non elderly uninsured.  This information is from the CBO.  This would also reduce the federal deficit by $50 Billion over ten years.  The CBO stated the deficit would continue to decrease over the following decade.  There would still be 25 million uninsured of which 1/3 would be illegals.  The bill would be funded by a tax on health care "Cadillac" plans.  There would also be a tax on other sectors of the healthcare industry.  I saw nothing about getting rid of salt to save Billions in care but did see a penalty on those who are being frugal and using HSAs.  The major income producer is a reduction in Medicare spending.

The CBO has broken down the monies to
Paying monies to low income families to buy insurance- $463B
Expand Medicaid and SCHIP- $287B
Misc. costs such as bonus for primary care physicians- $54B
Tax credits to small business- $24B
Stop payment cuts to MDs for 1 yr- $11B

Income would be from 
Tax on Cadillac plans $215B
Cutting payment to Medicare Advantage $125
Fee on health insurers $40B
Fee on medical device makers $30B
Employer penalties for employees enrolling in govt plan $27B
Fee on Pharma $17B
Limit on HSA $16B
Fee Clinical Labs $5B

When one adds the two columns the income is 1/2 the outflow.

The Senate Finance Bill also has in it a prohibition on physician owned hospitals taking Medicare patients from physician owners if by November this year they do not already accept Medicare patients.  This is a tip of the hat to the AHA who continues to be afraid of any competition and who pays alot of money to get their point across.  All physicians would be required to participate in the Medicare Quality Initiative by 2011 even if they do not have EMR.  Medicare would have to evaluate physician services and see if any are over or under evaluated.  They would then have to reset the payments.

There have been over 500 amendment to the Baucus bill to date.  Baucus has agreed to some modifications already.  These include a decrease in the  amount of money charged to people who do not buy insurance (Obama says not a tax but the money will be collected by the IRS).  There will be some occupations exempt from the tax on "Cadillac" health plans.  The actual tax will be increased from 15% to 40%.  This will be passed on to the purchasers of the insurance.  These changes will add an additional $50 Billion to the cost and take away the money that would have been saved under the original plan.  A new part of the plan would allow HSA contributions to be $2500, up from $2000.  The changes will continue until the original plan is unrecognizable.  

The People's Republic of Massachusetts, where alot of this came from is continuing to be cash poor.  The insurers are now raising their rates about 10% making employers reduce benefits and make workers pay more.  One must look at the Republic's mandates to the insurers as a major cause of the increase.  The Republic has the highest cost for family plans in the nation.  The Republic mandates fertility treatment coverage but not lab or pharmaceuticals.  They also allow people who get coverage to then drop the coverage after an illness is taken care of.  I doubt if the Feds will be as stupid as the Republic.

Modern Healthcare has a letter from a Sacramento, California physician calling a prior article by a Modern Healthcare writer uninformed.  The physician points out that the difference between non profits and for profits is negligible when it comes to profits and whether one is unethical or not.  He then names the government programs that are money losers.  The range from the Post Office to Social Security. He goes on to state that administrative costs of the insurers is not the driver that makes healthcare so expensive.  The culprit is first dollar coverage, patient expectations, the continuation of major tech advances and an absence of a primary care driven system.  He believes the government is incapable of administering any program as they are all rife with misuse and the inability of the politicians to have the backbone to fix them. 

California hospitals are backing a legislative proposal to tax them $2 Billion in order to get double that in federal aid.  This money would then be paid back to hospitals in higher Medicaid payments.  The measure has passed both houses but the Terminator has not decided whether or not to veto the proposal.       Top


A bill was introduced in both the House and the Senate to repeal the McCarran Ferguson Act that give antitrust immunity to insurance companies.  The bill would only repeal the Act for med mal and health insurance companies.  The other insurance companies would still have the immunity.        Top


DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.