The Blue Dogs claim their deal with Chairman Henry Waxman achieved major improvements to the House Democrat Health Reform Bill. After analyzing the Blue Dog Deal (“Deal”), it is clear that the only thing the Blue Dogs achieved was making a bad bill worse. The Deal does nothing to ensure (1) that Americans will be able to keep their current health insurance if they like it, (2) that a federal government bureaucrat will not come between Americans and their doctors, (3) that Americans, including small businesses, will not have to pay higher taxes, and (4) that the House Democrats’ bill will not add to federal budget deficit.
This Deal was approved by the House Energy and Commerce Committee in three separate amendments: (1) Blue Dog Omnibus; (2) Unity Amendment I (Progessive_005) and (3) Unity Amendment 2 (Premiums and Drugs_003). The Deal includes the following provisions:
• Although the Deal purports to allow for negotiations on rates between providers and the government plan, the Deal effectively will result in the government plan paying rates equal to Medicare payment rates and ensures that providers forced to participate in government plan are not paid market rates. In fact, it specifically prevents government plan from paying market rates to hospitals and doctors. This will cause cost-shift (from government plan to private health plans), preventing the government plan from operating on a level playing field with private companies. Because there will not be a level playing field, the private insurance market will be destroyed and Americans’ access to their current health plans will be destroyed along with it.
• The Deal mandates that the government negotiate drug prices for Medicare Part D plans. This will lead to the establishment of a formulary, which would allow government bureaucrats to decide which drugs seniors can and cannot have covered under their plans. CBO has consistently found that allowing the Secretary to interfere in negotiations between Part D plans and drug manufacturers yields negligible savings unless the Secretary severely restricts medications that seniors have access to.
• The Deal requires health plans to provide information to Americans on end of life planning.
• The Deal increases the amount of individuals eligible for affordability credit. Further, the Deal claims to increase cost sharing for premium subsidy, but gives the new Health Choices Commissioner even more power by authorizing the Commissioner to change the premium subsidy at her discretion. This is yet another power given to this new federal government bureaucrat.
• The Deal decreases Federal Matching Assistance Percentage (FMAP) payments under Medicaid for childless adults from 100% to 90% starting in 2015, but it still retains the costly new entitlement and forces states to pay for part of it. Currently, childless adults are not mandated to be covered under Medicaid. This provision dramatically increases spending, but does nothing to help Americans because many current Medicaid recipients have trouble seeing doctors due to Medicaid’s low reimbursement rates.
• The Deal creates new health insurance cooperatives, but it keeps the government plan.
• The Deal establishes a new Center for Medicare and Medicaid Payment Innovation within CMS.
• The Deal states that the Secretary must establish a drug formulary for prescription drugs prescribed under the government-run plan. Similar to the provision allowing government negotiation in Medicare Part D, this will allow government bureaucrats to decide which drugs Americans will have access to under their plans
In short, despite their grandstanding, it is clear that the only thing that the Blue Dogs did was make a bad bill even worse.
