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Democrats, GOP Prep for Possible Weekend Vote on Health Reform

March 18, 2010 at 12:00 AM EST
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House Democrats are preparing for a vote on health care legislation, after the Congressional Budget Office reported the bill will cost $940 billion but would cut more than expected from the deficit. Jeffrey Brown talks to two health and policy experts about the cost of the legislation.
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JIM LEHRER: House Democrats got down to dollars and cents on their health care reform bill today, and President Obama dropped plans to go overseas, so he could stay and lobby for votes.

“NewsHour” congressional correspondent Kwame Holman begins our coverage.

KWAME HOLMAN: Democratic leaders unveiled their so-called reconciliation package today. It encompassed changes to the bill the Senate passed last December.

House Speaker Nancy Pelosi:

REP. NANCY PELOSI, D-Calif., speaker of the house: There is more affordability for the middle class in the legislation, in the reconciliation package that we will pass.

KWAME HOLMAN: The Congressional Budget Office reported the bill would cost more than earlier versions, about $940 billion over 10 years. But the CBO said it would cut more from the deficit, about $138 billion, through 2019, and another $1.2 trillion in the following decade.

House Majority Leader Steny Hoyer:

REP. STENY HOYER, D-Md., majority leader: This bill is the biggest deficit reduction bill that any member of Congress is ever going to have the opportunity to vote on.

KWAME HOLMAN: And Pelosi said the substitute plan posted online this afternoon will curb the growth of Medicare costs and make Medicare solvent for an extra nine years. And it eliminates a special Medicaid funding deal in the Senate bill that applied only to Nebraska.

REP. NANCY PELOSI: We didn’t like the state inequities as a category, and this bill corrects the state inequities by making the Medicare — excuse me — Medicaid reimbursements more fair to all of the states.

KWAME HOLMAN: The Democratic leaders said the cost estimates and other features gave them additional momentum to push ahead with a Sunday vote on the overhaul legislation.

But Speaker Pelosi was still working to drum up the 216 votes needed to pass it.

REP. BARON HILL, D-Ind.: That moves me a step forward.

KWAME HOLMAN: Democrat Baron Hill of Indiana is one of the undecideds. He said today’s report was a step in the right direction.

REP. BARON HILL: I’m encouraged about the numbers on the deficit, $1.2 trillion in the second 10-year period, and the $130 billion in the first 10 years. So, that’s even better than what the House and the Senate passed out. So, I’m pretty happy about the numbers.

QUESTION: So, will be voting for it?

QUESTION: Will you be voting yes?

REP. BARON HILL: Well, I haven’t — I need to see the final version before I commit to it. I want to make sure that we have crossed every T. and dotted every I. before I make it.

KWAME HOLMAN: But Republicans dismissed the CBO Report. House Minority Leader John Boehner said they would continue working to defeat the health care bill.

REP. JOHN BOEHNER, R-Ohio, house minority leader: They can tweak this thing and tweak it. Still, it’s a trillion dollars they’re going to spend. We have made clear that it’s time to scrap this bill and we would start over on commonsense reforms to make our current health care system better.

But, no, they are going to continue to ram, ram, ram this bill through the Congress, every kind of scheme known to man, to try and get it through the Congress without a vote.

KWAME HOLMAN: Republicans tried and failed today to block any effort to let the House pass the changes it wants without ever actually voting on the less popular Senate bill.

For his part, President Obama welcomed the cost figures out today. He said the health care legislation will be the most significant deficit-reducing effort in more than 20 years.

U.S. PRESIDENT BARACK OBAMA: This is but one virtue of a reform that will bring new accountability to the insurance industry, and greater economic security to all Americans. So, I urge every member of Congress to consider this as they prepare for their important vote this weekend.

KWAME HOLMAN: Later, White House officials announced the president has postponed his trip to Indonesia and Australia until June.

Spokesman Robert Gibbs said that, while Mr. Obama had been scheduled to depart on Sunday, he’s staying to continue his lobbying effort.

ROBERT GIBBS, White House press secretary: The passage of health care reform is of paramount importance, and the president is determined to see this battle through.

KWAME HOLMAN: Both White House aides and Democratic leaders talked optimistically today of getting the votes they need. They didn’t say how close they are.

JEFFREY BROWN: And for a closer look at the bill’s costs and savings, I’m joined by Neera Tanden of the Center for American Progress. She served as a senior adviser for the Obama administration at the Department of Health and Human Services until last month. And Gail Wilensky, economist and senior fellow at the Project HOPE Foundation, she served in Republican administrations and on Medicare payment commissions. She also sits on the board of the insurance company UnitedHealth Group.

Welcome to both of you.

First, let’s start by helping people understand what the CBO report is.

Neera Tanden, start. What is it? What is it, and what isn’t it?

NEERA TANDEN, senior vice president for academic affairs, Center for American Progress: Well, basically, there’s a new package of proposals that merges the House and Senate health care bills.

We had a vote in both chambers. And now the normal process, they have a conference, but, over the last several months, they basically have come to an agreement between the two — between the two houses as to what they would like the final bill to be.

And what CBO did was an analysis of how that bill, the merged bill, the reconciliation bill, and shows — it tells us how many people we’re covering, how much it costs, what the revenue estimates are. So, that’s what CBO found today.

JEFFREY BROWN: Gail Wilensky, what do you see? It’s an estimate. It’s not something that you can hang your hat on for 10 or 20 years out, but it’s — it’s a respected estimate.

GAIL WILENSKY, Project HOPE: Yes.

Let me first explain what the Congressional Budget Office is, in case some of your listeners don’t know. It’s an independent group. It’s a body that’s appointed by the Congress, very well respected for independent estimates, was first crafted in the 1970s to give the Congress an independent view of the cost and the revenues associated with various legislation, so it would haven’t to rely on the Budget Office of the administration.

It’s very well regarded. If you actually look at the language that the Congressional Budget Office put out, it goes out of its way to say, this is preliminary — they didn’t actually have the language of the legislation — and to say, based on what we know, this is what we expect.

It is usually regarded by most people as being without bias, frequently wrong, particularly for very complicated legislation, because it’s so hard to be able to estimate anything nearly as complicated as this.

JEFFREY BROWN: All right. So, when you two look at it, what jumps out at you as the key thing that people should understand from the latest version here scored or measured by CBO?

NEERA TANDEN: Well, most importantly, we have deficit reduction over the first 10 years. You know, a lot of moderate members have been concerned about that. A lot of Americans are concerned about adding to the deficit in these difficult times. So, this is actually a large-scale deficit-reduction bill. It saves over $100 billion.

And what’s really most critical is, from their estimates — and they’re looking at the policies of the bill itself — they’re finding that, in the second 10 years, we will have over a trillion dollars in savings.

And for those people who have been concerned about costs, what’s really a concern is that we have skyrocketing costs over the next 20 years, 30 years, 40 years. So, the fact that we have such significant savings in the second decade is really paramount importance. And then we have those savings found in the House bill.

JEFFREY BROWN: All right, so those are the numbers they present. Now, where are the savings coming from, and what do you see when you look at the particular, the specific programs?

GAIL WILENSKY: I’m glad you asked me that.

More than half of the spending is financed by reductions in Medicare spending, more than $500 billion over the next 10 years. The reason this is so important is what’s not in the bill. When the Congressional Budget Office gives it estimate, it does against current law. They have to assume that all laws that are on the books now occur and that there are no other changes other than what the law is that they’re asked to estimate.

Normally, that’s perfectly sensible. Right now, there’s a big problem, and that is, Medicare is facing a very big reduction in payments to physicians if nothing else happens. Physicians would have their fees reduced by 21 percent. The Congress has been bumping the day out when this happens. First, it was February. Then it was March. Now it’s April 30.

Nobody expects that physicians will actually face that kind of reduction.

JEFFREY BROWN: And, therefore, we shouldn’t go by these numbers, or…

GAIL WILENSKY: Well — no, well, what you need to know is the CBO estimate of what it will cost to fix this is $230 billion, almost twice the savings in those first 10 years.

The reason it’s so important is, so much of the savings is coming out of Medicare payment reductions, that Congress is getting every single penny they think politically they can get out of Medicare, but they’re not paying for the fix to physicians. That ought to be regarded as a very serious problem.

JEFFREY BROWN: All right. You want to jump in here?

NEERA TANDEN: Yes.

I mean, and what I would say to that is that that is an important issue. It’s not necessary to health reform. And it is one that the Congress should address, that can be addressed, and will be addressed. Both sides — both sides of the Congress and of the president are committed to changing the SGR and the payment system. And that’s something that can be addressed.

But that shouldn’t detract from the fact that we have substantial savings in this bill, that we have substantial reforms in the system, and that we’re finding that this is a bill that will have savings to the system, savings to national health expenditures and to the federal government.

JEFFREY BROWN: Another area that I know you focused on, on where possible savings are in this bill is in the way health care is delivered.

NEERA TANDEN: Mm-hmm.

JEFFREY BROWN: Explain how — how you see savings.

NEERA TANDEN: Well, I actually this the Congressional Budget Office estimate is very conservative, because there are a range of savings proposals in the bill that they give very little credit for, zero — say it will save zero or a few billion dollars.

JEFFREY BROWN: You mean it should look even better than…

NEERA TANDEN: Yes. And it’s — what — over a long term, I think, you know, there are many people, many health economists who believe things — the ways in which we change the payment reform system, bundle payments, so that we’re moving away from fee-for-service, and really pushing towards providing care, providing reimbursement for delivery.

So, if you have a heart attack, you are — the provider system is actually paid for that. And, so, those are — CBO gives no credit for that — for these demonstrations and these plans within — within the system. And I think a lot of people believe those are actually the ways over the next 10, 20 years we will have more substantial savings.

JEFFREY BROWN: Do you buy that, there that there’s actually more savings there than they’re giving credit for?

GAIL WILENSKY: There’s some promise…

JEFFREY BROWN: Some promise?

GAIL WILENSKY: … for the savings.

The reason is that these are all pilots. They are attempts to figure out how to do things differently, how to put the payments together for taking some — care of somebody with a bypass surgery or for chronic disease, or maybe combining the payments for physicians and hospitals that are not formally integrated.

The problem, having been there, having run Medicare and actually done a bypass demonstration, where we paid a single amount in the early 1990s, is, the history is, promising pilots frequently don’t make it into law.

So, I would be much more convinced that some of these delivery system reforms might actually save money if we had triggers, so that, if a demonstration or a pilot improves quality and doesn’t increase cost, or reduces cost and is at least neutral when it comes to quality, if not improving it, it becomes part of the Medicare program.

That would be much more convincing to me than what we see. The real areas that were looked at as reducing costs by most economists — I am a health economist, as you had indicated earlier — have been emasculated, at least for these first 10 years. It was the tax on the Cadillac plans. That’s now bumped out until 2018.

JEFFREY BROWN: Those are the high-cost insurance plans, right.

GAIL WILENSKY: Exactly.

They won’t take effect until the end of the next decade. Then they’re supposed to take in effect a major way. But, you know, that’s a whole long time ago. Or to have this supercharged Medicare payment advisory commission that could make decisions on its own, but, basically, everything that costs money has been taken out of its purview.

So, the savings are by reducing payment. They’re not by reforming the system. There’s a big difference between using the same Medicare system with its not-very-helpful incentives and just reducing payments.

JEFFREY BROWN: Let me just ask you briefly before we go, because to what extent is this a political document? We saw in Kwame’s piece, of course, congressmen are watching this carefully. So, how does this document like this, weighing the numbers, play into the vote-wrangling that we’re seeing?

NEERA TANDEN: Well, I think it’s critically important.

A lot of moderate members in the House, a lot of moderate Democrats, have talked about for months the importance of cost savings. And now they have a CBO score that shows them that what they will be voting on, the reconciliation package, actually has greater deficit reductions than the House bill. And so they have a path to vote yes on this bill.

So, I think it’s very important. But I would also say, just in response to Gail, that I think, you know, we have an independent payment advisory board. There are steps in here that really give teeth to these savings, and that we’re all hopeful, and the president’s whole prestige is on savings over the long term.

JEFFREY BROWN: All right.

NEERA TANDEN: So, I think there will be a lot of impetus.

JEFFREY BROWN: All right. We will keep — we will keep watching and debating.

Neera Tanden and Gail Wilensky, thank you both very much.

GAIL WILENSKY: Thank you for having us.