This week, House and Senate authorizing committees marked up portions of the FY2006 spending reconciliation bill (as-yet-unnumbered). Under the FY2006 budget resolution (H. Con. Res. 95), authorizing committees were directed to find $34.7 billion in mandatory spending cuts over five years (see The Source, 4/29/05).
Senate Committee Action
On October 25, the Senate Finance Committee approved, 11-9, its portions of the draft bill, which would establish $10 billion in savings over five years.
The bill would produce $4.26 billion in savings from Medicaid by recalculating the price paid for prescription drugs, increasing rebates for outpatient drugs, making it more difficult for seniors to spend down their assets in order to qualify for Medicaid, creating rules to crack down on fraud and abuse in the program, and tightening the definition of “case management services” that can be billed to Medicaid.
The measure would extend Medicaid coverage for children with disabilities whose family income is above the financial standards for Supplemental Security Income but no more than 300 percent of the federal poverty level. In addition, $1.9 billion would be provided for Louisiana, Mississippi, and Alabama to help pay their Medicaid costs, with the federal government covering 100 percent of the costs through May 31, 2006.
The bill also would produce $5.78 billion in savings from Medicare by reducing the reimbursement for durable medical equipment, providing higher payments to insurance plans that cover sicker patients and lower payments to plans that cover healthier patients, eliminating the “stabilization” fund created by the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 (P.L. 108-173), basing reimbursement rates on “pay for performance” standards, reducing the reimbursement of a skilled nursing facility’s bad debt to 70 percent from 100 percent of allowable costs, and prohibiting physicians from referring Medicare and Medicaid patients to specialty hospitals in which they have ownership or investment interests.
During consideration of the bill, the committee approved, without objection, a substitute amendment offered by Chair Charles Grassley (R-IA) that would authorize $25 million in FY2007 for a grant program to increase participation of eligible children in Medicaid and the State Children’s Health Insurance Program. The substitute also would establish demonstration projects under which states would be required to reimburse institutions for the treatment of mental illness and would increase the use of home- and community-based long-term care services.
The committee rejected the following amendments:
The following amendments were considered and withdrawn:
On October 26, the Senate Budget Committee approved, 12-10, the comprehensive reconciliation measure, which incorporates legislation marked up by 8 authorizing committees.
The bill would establish $39 billion in savings over five years, including $3 billion from the Agriculture, Nutrition, and Forestry Committee; $470 million from the Banking, Housing, and Urban Affairs Committee; $5 billion from the Commerce, Science, and Transportation Committee; $2.5 billion from the Energy and Natural Resources Committee; $27 million from the Environment and Public Works Committee; $13.7 billion from the Health, Education, Labor and Pensions Committee; $565 million from the Judiciary Committee; and $10 billion from the Finance Committee.
The Senate is expected to consider the FY2006 spending reconciliation bill next week.
House Committee Action
On October 26, the House Ways and Means Committee approved, 22-17, its portions of the draft bill, which would establish $8 billion in savings over five years.
The measure would incorporate the text of a bill (H.R. 240) to reauthorize the 1996 welfare reform law (P.L. 104-193). The Subcommittee on Human Resources approved the measure on March 15 (see The Source, 3/18/05), and the House Education and the Workforce Committee approved the bill on October 20 (see The Source, 10/21/05).
The reconciliation bill would gradually reduce from 66 percent to 50 percent the federal matching of state child support administrative costs. The measure also would set uniform eligibility rules for foster care and adoption assistance, and would clarify that eligibility for foster care and adoption assistance is based solely on the eligibility of the original home from which the child was removed. In addition, the bill would require states to establish a goal to encourage marriage within their welfare programs and discontinue a goal to reduce out-of-wedlock pregnancies.
During consideration of the bill, the committee approved, by unanimous consent, a substitute amendment offered by Chair Bill Thomas (R-CA) that would increase funding for child care programs by $500 million over five years, instead of $1 billion as originally provided in H.R. 240. The substitute also would increase from 30 percent to 50 percent the amount that states could transfer to the Child Care Development Block Grant from the Temporary Assistance for Needy Families program. In addition, the substitute would eliminate the federal matching of state child support incentive funds.
The committee also approved, by unanimous consent, an amendment offered by Rep. Jim McDermott (D-WA) that would require grant recipients of marriage promotion funding to describe how they will address domestic violence and ensure that participation in marriage promotion programs is voluntary.
The committee defeated, 17-21, a Democratic substitute amendment offered by Rep. Pete Stark (D-CA) that would have increased funding for child care child care programs, allocating $4.7 billion in FY2006 and FY2007, $4.8 billion in FY2008 and FY2009, and $4.9 billion in FY2010. The substitute also would have reduced overpayments to private insurance plans that offer benefits in place of traditional Medicare, eliminated the stabilization fund created by the MMA, and set payments for the Medicare Advantage program services based on local fee-for-service costs.
The committee also rejected the following amendments:
On October 28, the House Energy and Commerce Committee approved, 28-22, its portions of the draft bill, which would establish approximately $9.5 billion in savings from the Medicaid program over five years.
The measure would recalculate the price Medicaid pays for prescription drugs, allow states to raise over a three-year period some Medicaid beneficiaries’ cost-sharing from $3 to $5, make it more difficult for seniors to spend down their assets in order to qualify for Medicaid, and give states the flexibility to structure Medicaid coverage in a fashion similar to private health insurance plans. The bill also would provide $2.5 billion for Louisiana, Mississippi, and Alabama to help pay Medicaid costs, with the federal government covering 100 percent of the costs through May 15, 2006.
During consideration of the bill, the committee adopted, by voice vote, an amendment offered by Chair Joe Barton (R-TX) that would allow states to provide health care benefit packages only to those groups established as eligible prior to enactment of the bill.
The committee rejected the following amendments:
