Bill to Rescue Children’s Health Program Hits Snag in House

By Robert Pear
The New York Times, October 4, 2017

Legislation to rescue the Children’s Health Insurance Program sailed through a Senate committee on Wednesday, but touched off a partisan conflict in the House, diminishing hopes that the popular program would be quickly refinanced.

By voice vote, the Senate Finance Committee approved a bill on Wednesday that would provide more than $100 billion over five years for the program, which insures nearly nine million children.

The Senate bill does not specify how the government would pay for extending the children’s health program.

But in the House Energy and Commerce Committee, lawmakers brawled Wednesday over a similar bill to provide money for the children’s health program. Democrats strongly support the program, but complained that Republicans would take money from Medicare and the Affordable Care Act to offset the cost.

The House committee eventually approved the bill, by a vote of 28 to 23, with all of the opposition coming from Democrats.

One provision of the House Republican bill would require older Americans with income of more than $500,000 a year to pay higher Medicare premiums.

“Folks that earn a half-million dollars a year and are over 65, they can pay a little bit more for Medicare,” said Representative Fred Upton, Republican of Michigan. “And you know what? If they don’t want to pay, they don’t have to enroll. That’s a choice they will have.”

https://www.nytimes.com…

“Helping Ensure Access for Little Ones, Toddlers, and Hopeful Youth by Keeping Insurance Delivery Stable Act of 2017” – See Sec. 203:
http://docs.house.gov…

Modifies Section 1839(i)(3)(C)(i)(II) of the Social Security Act:
https://www.ssa.gov…

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Means testing Medicare

Comment by Don McCanne, M.D.
PNHP Quote of the Day, December 11, 2012

Now that health care costs are unbearably high, Medicare must be progressively financed since moderate- and low-income individuals can no longer bear the full costs. A major step forward was the removal of the cap on wages subject to Medicare taxes, so higher income individuals pay more. The Affordable Care Act also added a new 0.9% Medicare tax for incomes over $200,000/$250,000.

In addition, in order to help cover Medicaid expansion and subsidies for the exchange plans, the Affordable Care Act also added a 3.8% tax on investment income, again for those with incomes over $200,000/$250,000. So we have already embarked on policies that make health care financing progressive, though we need to do more, but only on the financing end.

Medicare benefits should be the same for everyone. We should eliminate premiums and cost sharing, and we should expand benefits so that administratively wasteful Medigap and retiree health benefit programs are no longer necessary. Low income individuals should receive the same standard of care as the wealthy, just as was the intent in enacting the traditional Medicare program.

Introducing means testing, which we have already begun with Part B and Part D premiums, reduces support of wealthier beneficiaries who are annoyed by these additional charges. Once the principle of means testing is established, the budget hawks ratchet it up, driving wealthier individuals to look for private options, currently available as the Medicare Advantage plans. It is only one small additional step to introduce premium support – vouchers – where the wealthy will take their money and run. Once you lose support of wealthier individuals who have a strong political voice, then Medicare will descend down the path toward becoming a welfare program.

http://www.pnhp.org…

There seems to be consensus that the Children’s Health Insurance Program (CHIP) should be renewed but there is considerable disagreement on how to pay for it. One proposal is to increase Medicare premiums for those with incomes over $500,000, making them pay the full Medicare Part B and D premiums with no contribution from the government. They can certainly afford it, so why shouldn’t we do that?

Because of the high costs of health care and the modest incomes of most beneficiaries, the funding of Medicare must be progressive. We are already doing that to a limited extent through the taxes that fund the Medicare program. But it is imperative that we limit progressive funding to the revenue side of the ledger while keeping benefits uniform for everyone on the spending side. Why?

Medicare is an egalitarian program designed to provide everyone who is eligible with the health care that they need regardless of ability to pay. Everyone has the same health care benefits. But the Part B and D premiums are means-tested – higher-income individuals pay larger premiums. The extra premiums paid can be considered to be a net reduction of the Medicare benefits. When the government contribution is reduced by 100 percent, then the individual is paying the full costs for Parts B and D in addition to what has been paid through payroll taxes and general revenues.

Inevitably this would cause high-income individuals to look for other options in the private sector. Since this is the Medicare segment with the strongest political voice, support for the program would decline, converting Medicare into a chronically underfunded welfare program.

Of course, the politicians are fully aware of this. As Representative Fred Upton says, “And you know what? If they don’t want to pay, they don’t have to enroll. That’s a choice they will have.”  Obviously this advances the efforts to privatize Medicare, opening the door for premium support (vouchers).

Medicare premiums, deductibles, and coinsurance are unnecessary and should be eliminated. The entire program can be funded much more equitably through the tax system, which is the way it should be when we convert it to an improved Medicare for all.

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