Health Care Issues Key in Budget Battle

BY Lea Winerman  April 8, 2011 at 5:20 PM EST

The news this week in Washington is all budget, all the time: Will Congress work out a budget deal before Friday’s midnight deadline, or will the federal government close until a compromise can be found?

The Obama administration says that health reform implementation will continue even if there’s a shutdown, according to Politico, because it’s funded by mandatory spending in the law. But it will almost certainly slow down, because many of the federal staffers who are writing the law’s regulations would, like hundreds of thousands of other federal workers, be on temporary unpaid leave — for an unknown length of time.

Meanwhile, all the week’s budget negotiations are, in a sense, just a prelude to the real fight. This week’s battle is about funding the rest of the 2011 fiscal year — just the next six months. Wrangling over next year’s budget is just beginning.

On Tuesday, Rep. Paul Ryan, R-Wisc., chair of the House Budget Committee, unveiled the Republicans’ proposed budget plan. It would cut $6 trillion across the gamut of federal spending, but we’ll focus here just on the health-care aspects.

First, the budget would repeal the health reform law. Then, it would replace the current Medicaid program with block grants to states to provide health insurance for the poor, cutting $700 billion from the program and giving states more leeway in how they use their Medicaid money. It would also replace Medicare as it is now — a government-run entitlement program — with a system of subsidies for seniors to buy private insurance.

Ryan discussed his plan on the NewsHour Tuesday.

“The actuaries at Medicare tell us that doing it this way brings Medicare into solvency and pays off the debt,” he said.

On Wednesday, Rep. Chris Van Hollen, D-Md., gave a Democratic response.

“What that would do is force seniors off the Medicare program into the private insurance market, where their costs of health care are rising. So, the entire risk of health care would be borne by the seniors,” Van Hollen said.

Senate Passes 1099 Repeal

Meanwhile, in all the budget news, you might have missed this: On Tuesday, Congress passed the long-awaited “1099 repeal,” the first legislative rollback of any health reform provision.

Democrats and Republicans had a rare moment of bipartisan agreement over the fact that the new tax reporting requirement in the health reform law was a burden to small businesses and should be repealed — but they couldn’t agree on how to pay for the lost revenue. Republicans won that round — on Tuesday, the Democratic Senate passed the version that the Republican House passed earlier this year, which pays for the measure by making people who get health insurance subsidies pay back those subsidies if their income increases over the course of the year.

Critics, like the left-leaning Center on Budget and Policy Priorities, argue that that will weaken health reform by making people less likely to apply for the subsidies in the first place.

And one final note. This will be my last “health reform headlines” post, but the feature — and the rest of the NewsHour’s coverage of health reform will continue with correspondent Betty Ann Bowser and producer Sarah Clune. Visit our new Health page to see more.