Monday, December 7, 2009

Health Care Reform: Cuts in Home Health Care

Today the climate change conference begins in Copenhagen, but in the US the focus remains on health care. The Senate met over the weekend and is working through the various issues.

Here are the results on three particular measures:
  1. Cuts in payments to private Medicare Advantage plans. Democrats argue that the private plans are unfairly subsidized by the federal government, and the proposed bill would make cuts of $118 billion over ten years. Republican Jon Kyl (Arizona) said Democrats were breaking President Obama's promise that “if you like your health care plan, you’ll be able to keep it.

  2. New long-term care benefits. Under the Democratic proposal, people could qualify for cash benefits if they became severely disabled after voluntarily paying long-term care premiums for at least five years. This measure will stay in the bill (a majority of Senators voted against it, but the rules require 60 votes to remove it).

  3. Cuts to home health care agencies. The Democrats argue that home health care reimbursements are one of the areas where waste can be cut; this measure passed (although Jim Webb, Ben Nelson, and two other Democrats voted against it). The bill contemplates cuts of $43 billion (13%) over ten years. Here are the conflicting perspectives on the home health care cuts:
  • Max Baucus: “We are reducing overpayments ... we are rooting out fraud. We are getting the waste out. The savings go back in Medicare and extend the solvency of the trust fund.
  • Mike Johanns: (Republican of Nebraska): “The cuts will hurt real people.
So this is interesting: the Democrats are proposing cuts in some areas (home health care, Medicare Advantage), but adding new benefits in others (long term care). It does not seem entirely philosophically consistent, but I guess the idea of comprehensive reform is that you do treat various aspects of the system differently, depending on the cost/benefit calculus in each case.

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