From Clinics to Child Insurance, Budget Deal Affects Health Care


WASHINGTON — The budget deal speeding through Congress is billed as a measure to grant stability to a government funding process that has lurched from crisis to crisis — but it is also stuffed with provisions that will broadly affect the nation’s health care system, like repealing an advisory board to curb Medicare spending and funding community health centers.

Many of the provisions have been in gestation for months, even years in some cases. Some will save money. Many will cost money — potentially a lot of money.

Among the more significant provisions is one that would eliminate a powerful 15-member panel, known as the Independent Payment Advisory Board, created by the Affordable Care Act to control the rising costs of Medicare.

President Barack Obama and his first budget director, Peter R. Orszag, as well as some health economists, championed the board as one of the most significant cost-control provisions in the 2010 health law. The board was to recommend specific savings if Medicare spending per beneficiary was projected to grow faster than certain benchmarks. Congress could have stepped in to block the recommendations, but they did not need congressional approval to take effect.

The power of the board gave pause to politicians in both parties, and health care providers and some advocates for Medicare beneficiaries said it could threaten patients’ access to care. President Trump and other Republicans singled out the panel as a symbol for much that was wrong with Mr. Obama’s health law.

The benchmarks that were to set off the Medicare recommendations have yet to be met, and the board members have never been appointed. Nevertheless, the board has been seen as a threat. The House passed a bill in November to eliminate the board, by a lopsided vote of 307 to 111, and 76 Democrats joined Republicans in trying to kill the panel.

Now, under the budget deal, it would be eliminated.

The Congressional Budget Office estimated that killing the panel would increase federal spending by $17.5 billion over 10 years.

“The board’s unprecedented authority to alter Medicare policy could ultimately reduce seniors’ access to health care and put the government, rather than the patient, at the center of the health care system,” said Representative Erik Paulsen, Republican of Minnesota.

The budget bill also spends money. It provides $3.8 billion for the current fiscal year and $4 billion for 2019 to fund community health centers — up from $3.6 billion last year.

Community health centers have long had strong bipartisan support, but funds were allowed to expire at the end of September. As a result, some health centers have had to curtail services, freeze hiring or put off purchases of equipment.

The increase in funds was a victory for Republicans like Senator Roy Blunt of Missouri and Elise Stefanik of New York and Democrats like Senator Jon Tester of Montana and Debbie Stabenow of Michigan.

The clinics care for more than 27 million people, regardless of patients’ ability to pay. “They provide incredibly affordable and efficient health care,” especially in big rural states like Montana, Mr. Tester said.

The bill also includes an additional four-year extension of funds for the Children’s Health Insurance Program, from 2024 through 2027, on top of a six-year extension that Congress approved last month.

Nearly nine million children are insured by the program, which has had bipartisan support since its creation in 1997.

Senator Orrin G. Hatch of Utah, chairman of the Finance Committee, and Senator Ron Wyden of Oregon, the committee’s ranking Democrat, pushed for the longer extension after the Congressional Budget Office said it would actually save money — by keeping people out of health insurance exchanges, which would be more expensive to the federal government.

The bill would provide some relief to Medicare beneficiaries with high prescription drug costs who hit a gap in coverage known as the doughnut hole. Drug manufacturers would be required to give larger discounts to beneficiaries in the coverage gap, starting in 2019.

“Manufacturers of branded medications will face much higher liabilities in the Medicare coverage gap,” said Daniel N. Mendelson, the president of Avalere Health, a research and consulting company. “This change could have a multibillion-dollar impact on some large pharmaceutical companies.”

At the same time, health insurance companies would see their costs in the coverage gap decline.

Stephen J. Ubl, the president and chief executive of Pharmaceutical Research and Manufacturers of America, the main lobby for brand-name drug makers, denounced this change, saying it “provides a massive bailout for insurance companies” and undermined their incentives to control Medicare drug spending.

To help offset the cost of new spending in the bill, Congress would take some money from a fund established by the Affordable Care Act to pay for public health initiatives such as preventing diabetes, heart disease and cancer.

The bill would also increase premiums for Medicare beneficiaries with income of more than $500,000 a year ($750,000 for couples filing joint returns).

In addition, the bill would make it easier for states to eliminate Medicaid coverage for some low-income people who hit the jackpot in lotteries. Under current Medicaid rules, income received as a lump sum, such as lottery winnings, is counted as income only in the month when it is received. Lottery winners may lose Medicaid for a month, but then reapply and, in some cases, qualify for coverage at a later date.

Republicans said that Medicaid was created to help low-income people, not high-dollar lottery winners. The Congressional Budget Office said the number of people losing Medicaid because of this provision would be modest, no more than 10,000 in any month, out of more than 70 million people enrolled in Medicaid.


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