Congress Faces Choice on Health Care Funding

Copyright © 2007 National Public Radio®. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

STEVE INSKEEP, host:

Consider this congressional budget battle. In one corner you have children of the working poor. In the other corner, seniors and the disabled. Both groups want help. And if you're wondering who that group is stuck in the middle, it's the new Democratic Congress.

Here's NPR's Julie Rovner.

JULIE ROVNER: Democrats in Congress have made expanding the State Children's Health Insurance Program, known as SCHIP, their top health priority for the year. Unless they act by the end of September, the children's health program will expire. But there's another budgetary imperative this year, too. It has to do with the way Medicare pays doctors. According to a complicated formula set in 1997…

Mr. PETER ORSZAG (Director, Congressional Budget Office): Fees for physician services would be reduced by about 10 percent in 2008, and around 5 percent annually for at least several years after that.

ROVNER: That's Congressional Budget Office director Peter Orszag at a Senate Finance Committee hearing yesterday. But cuts that big aren't likely to happen. Similar payment cuts for doctors have been scheduled every year for the last five, and every year Congress has canceled them. Why? Because physician groups threaten that if you don't pay them enough, they'll stop treating Medicare patients, and nobody wants that to happen.

So every year lawmakers have postponed the cuts, and every time they've promised to fix the payment formula next year. But next year never comes. In the meantime, the price tag to make up that deficit keeps growing. Now says Orszag…

Mr. ORSZAG: The total cost would be something more like $330 billion over the next 10 years.

ROVNER: Out of the federal budget. But unlike in previous years when Republicans simply added the cost to the deficit, Democrats have pledged to pay as they go, to not spend more than they take in. Paul Ginsberg is president of the Center for Studying Health System Change and a former Medicare adviser. He says those new budget rules change Congress' political calculus.

Mr. PAUL GINSBERG (President, Center for Studying Health System Change): So in the case of fixing Medicare physician payments, the Congress now is going to be forced to find the money elsewhere. Whatever it decides to spend to fix this problem, it's going to have to do it with spending cuts or revenue increases.

ROVNER: And money the Democrats want to use to expand the Children's Health Insurance Program. It currently insures about six million children of the working poor each year. Another nine million children remain without coverage, and Democrats want to make sure those kids get health care, too.

New Jersey Democratic Congressman Frank Pallone chairs the House subcommittee that oversees both Medicare physician payments and the Children's Health Insurance Program. He says Congress shouldn't have to pit seniors against kids.

Representative FRANK PALLONE (Democrat, New Jersey): We need to fund SCHIP, and we need to expand it so we cover all the kids. We need to fix this Medicare reimbursement rate for physicians. I agree with you that it's not easy, but we're up to the challenge and we want to try.

ROVNER: And California Democrat Pete Stark, whose subcommittee also oversees Medicare, says he may have found a solution. He wants Congress to cut Medicare payment to HMOs.

Representative PETE CLARK (Democrat, California): We're drastically overpaying Medicare advantage plans. We just found out that it was $165 billion over 10 years. If we could just pay them fairly, we'd have enough money to help SCHIP and pay the doctors, and do a whole host of things. And we may - that could be our solution to getting out of this pay-as-you-go box that we're in.

ROVNER: Maybe, but Republicans including President Bush have already said they'll fight efforts to cut back those HMO payments, which could add yet another front to the impending budget battle.

Julie Rovner, NPR News, Washington.

Copyright © 2007 National Public Radio®. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to National Public Radio. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.