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2006-02-09 Kaiser Daily Health Policy Report - Thursday,
February 9, 2006
 Feb 09, 2006 12:08 PST 

A free service of kaisernetwork.org

View the Health Policy Events Calendar

Thursday, February 9, 2006

1. President Bush Signs FY 2006 Budget Reconciliation Measure
With Reductions for Medicare, Medicaid

2. McClellan Says CMS Hopes To Help Medicare Beneficiaries
Understand New Drug Benefit Better, But Will Not Reduce Number
of Available Drug Plans

3. Medicare Set To Begin Coordinated Care Pilot Program

4. New York Times Examines Decreasing Number of Employers
Offering Retirees Health Benefits

5. Many Doctors Have Not Returned to New Orleans After Hurricane

6. Feres Doctrine Prevents Military Personnel From Filing
Medical Malpractice Claims

7. Dallas Morning News Looks at Switzerland's Health System

8. Attorneys for Maryland Legal Immigrant Children Dropped From
Medicaid Can Petition Court for Care, Maryland Court of Appeals

9. Illinois Hospitals React to Attorney General's Proposed
Guidelines for Tax-Exempt Status

10. Report Examines Idea That Increased Spending Improve Health
Care Outcomes

11. Editorials, Opinion Pieces Address Recent Actions on Federal

12. Editorials, Opinion Piece Examine Medicare Prescription Drug

13. Wal-Mart President/CEO Addresses Maryland Law Requiring
Large Employers To Spend Certain Amount on Health Benefits



1. President Bush Signs FY 2006 Budget Reconciliation Measure
With Reductions for Medicare, Medicaid

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President Bush on Wednesday signed the fiscal year 2006 budget
reconciliation bill (S 1932), which contains $40 billion in
spending reductions from Medicare, Medicaid and other programs,
the Washington Post reports (Baker, Washington Post, 2/9). The
measure, which the Senate approved 51-50 in December 2005 and
the House approved 216-214 earlier this month, includes $6.4
billion in spending reductions from Medicare and $4.8 billion in
spending reductions from Medicaid over five years. It will allow
states more flexibility to charge Medicaid beneficiaries higher
copayments and deny services for lack of payment. In addition,
the law tightens restrictions on the transfer of assets by
seniors applying for long-term Medicaid coverage. The law also
makes seniors with home equity of more than $500,000 ineligible
for nursing home benefits. In addition, the law expands Medicaid
eligibility to children with disabilities whose families have
annual incomes up to 300% of the federal poverty level,
beginning Jan. 1, 2007. Provisions affecting Medicare include
higher premiums for some beneficiaries and a freeze in payments
for home health care providers. The law also cancels a scheduled
reduction in the Medicare physician reimbursement rate and
provides funding for medical care to some survivors of Hurricane
Katrina (Kaiser Daily Health Policy Report, 2/2). Speaking at
the bill signing, Bush said that without reforms to entitlement
programs, "spending for Medicare, Medicaid and Social Security
alone will be almost 60% of the entire federal budget" by 2030.
He added, "That will leave future generations with impossible
choices -- staggering tax increases, immense deficits or deep
cuts in every category of spending" (Pickler, AP/Houston
Chronicle, 2/8). Bush also said that his FY 2007 budget proposal
would reduce Medicare spending growth from 8.1% to 7.7%. He
said, "That's not a cut. It's slowing down the rate of growth.
It's the difference between slowing your car down to go the
speed limit, or putting your car in reverse" (Dennis, CQ Today,

House Ways and Means Committee Hearing

HHS Secretary Mike Leavitt on Wednesday testified before the
House Ways and Means Committee on Bush's $2.77 trillion FY 2007
budget proposal (Fagan, Washington Times, 2/9). The proposal
includes $36 billion in spending reductions for Medicare over
five years and nearly $5 billion in Medicaid spending reductions
over five years (Kaiser Daily Health Policy Report, 2/8).
Spending cuts for Medicare, which are the largest single
reduction in the proposal, include lowering hospital
reimbursement rates for an estimated savings of more than $8
billion over five years and reducing nursing home reimbursements
for an estimated savings of more than $5 billion over five
years. Bush's budget plan also would reduce Medicare home health
care provider reimbursements, for savings of $3.5 billion over
five years (Kaiser Daily Health Policy Report, 2/7). Leavitt
said the proposed changes to Medicare are "steps to improve the
long-term fiscal health of Medicare." Ways and Means committee
Chair Bill Thomas (R-Calif.) said the Medicare changes would
"support our commitment to ensure that providers are paid
accurately to secure the best deal for taxpayers and seniors."
Committee member Kevin Brady (R-Texas) said, "There probably
isn't an appetite" for the spending reductions in Congress.
Committee member Jim Ramstad (R-Minn.) said, "It's a hard sell,
for sure." Committee member Rahm Emanuel (D-Ill.) said the Bush
administration ignored key areas of possible Medicare savings,
including elimination of a so-called "slush fund" that aims to
encourage participation of insurance companies in Medicare.
Committee member Jim McDermott (D-Wash.) said that, while Bush
claims to be making health care a priority, he is actually
"whacking away at those programs" (Washington Times, 2/9).

House Budget Committee Hearing

The House Budget Committee on Wednesday also held a hearing on
Bush's FY 2007 budget proposal, with testimony from White House
Office of Management and Budget Director Joshua Bolten.
Committee Chair Jim Nussle (R-Iowa) said efforts to contain the
growth of spending on entitlement programs should be "regular
and routine." He added that Medicare and Medicaid are among the
government's "largest and least sustainable programs." Nussle
said that beginning this year, new earmarks for local projects
should be allowed only if lawmakers agree to cut entitlement
spending. "If we're not going to do reconciliation, if we're not
going to do reform, then I don't think we should be able to go
home ... and tell them about all the good things we brought
them," Nussle said (CongressDaily, 2/8). Nussle said he was
hopeful that the proposal would move quickly in the House. Some
Democrats on the committee "attacked" proposals to charge
enrollment fees and increase prescription drug copays for some
veterans and seniors at the same time that Bush is also
proposing to permanently extend tax cuts, CQ Today reports
(Dennis, CQ Today, 2/8).

House Veterans Affairs Committee

The House Veterans Affairs Committee on Wednesday held a hearing
on Bush's FY 2007 budget proposal for the VA. The budget
proposal calls for veterans with higher incomes or less-severe
disabilities to contribute higher copays for prescription drugs
and pay an enrollment fee. Committee Chair Steve Buyer (R-Ind.)
said that he supports the new enrollment fee and higher drug
copays because it would allow VA to focus on veterans with more
severe injuries. He added, "This budget sends a message that if
you are hurt or wounded, we will be there for you." Buyer said
that Congress likely will reject the enrollment fee and
increased copays, as it has in the past. He added that if the
proposals are rejected, Congress will be forced to "buy that
back into the budget." Some Democrats on the committee
"criticized the proposed fee increase as unacceptable," CQ Today
reports. Carl Blake, senior legislative director for the
Paralyzed Veterans of America, estimated that the additional
costs would lead about 200,000 veterans to forego VA health
coverage (Starks, CQ Today, 2/8).


2. McClellan Says CMS Hopes To Help Medicare Beneficiaries
Understand New Drug Benefit Better, But Will Not Reduce Number
of Available Drug Plans

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CMS is working to address problems in the implementation of the
new Medicare prescription drug benefit and is looking for ways
to make the program easier for beneficiaries to understand, CMS
Administrator Mark McClellan said during a Senate Finance
Committee hearing on Wednesday, USA Today reports (Wolf, USA
Today, 2/9). According to Dow Jones, McClellan would not commit
to a date by which the problems would be fixed but said CMS is
on track to address most of the major problems by March or April
(Dow Jones, 2/8). He also outlined several steps CMS has taken
or will take to address the problems, including:

*Requiring insurers offering Medicare drug plans to provide
beneficiaries with a 90-day supply of any medications they were
taking before the drug benefit took effect Jan. 1;

*Hiring a company to ensure that pharmacists, states and drug
plans all have the same information on beneficiaries;

*Conducting daily transfers of information between Medicare and
drug plans; and

*Reducing wait times on Medicare phone lines and increase the
number of phone line representatives from 3,000 to 7,800
individuals (Kumar, St. Petersburg Times, 2/9). McClellan said
legislative changes are not needed to fix the problems (Dow
Jones, 2/8). "Our focus is on taking any steps we can take
administratively now," he said (St. Petersburg Times, 2/9).
McClellan also said he does not plan to limit the number of drug
plans offered under the benefit, adding that competition between
plans has helped lower costs. He added, "We believe that we can
make competition work even better by simplifying the
presentation." McClellan said the simplified presentation would
help beneficiaries compare plans (USA Today, 2/9). In addition,
he said the Bush administration will consider prohibiting
beneficiaries from enrolling or switching plans at the end of
the month because those who do are experiencing problems
obtaining medications after the first day of the following
month, when their coverage is supposed to begin (Norman, Des
Moines Register, 2/9). "Hundreds of thousands of beneficiaries
switched plans in the last half of December, contributing to our
early January problems," he said, adding that CMS is encouraging
beneficiaries to enroll or switch plans by the middle of the
month rather than at the end of the month (Reichard, CQ
HealthBeat, 2/8).

Comments From Senators

Baucus said the Bush administration has implemented the Medicare
drug benefit "poorly" and discouraged beneficiaries from
enrolling by "paralyzing" them with choices (Schuler/Reichard,
CQ Today, 2/8). He also said he will introduce legislation that
would create uniform standards for drug plans, allowing easier
comparison of choices. Sen. Kent Conrad (D-N.D.) said the drug
benefit "is botched," adding, "I have never seen people so
angry" (Dow Jones, 2/8). However, Committee Chair Chuck Grassley
(R-Iowa) said, "It is very easy to sit up here and say, 'Well I
would have done a better job.' We are not here to assign blame
or point fingers." He added, "[I]t's time to move on. Now is not
time to make excuses. We need to have productive conversations
and decisive actions to current the recent shortcomings" (St.
Petersburg Times, 2/9). Sen. Orrin Hatch (R-Utah) said, "[W]e're
all amazed at how many companies want to participate" in the
drug benefit, adding, "I happen to think that's a pretty good


In related news, Sens. Susan Collins (R-Maine), Olympia Snowe
(R-Maine), Dianne Feinstein (D-Calif.), Lincoln Chafee (R-R.I.)
and six additional Senate Democrats are cosponsoring a bill that
would require drug plans to maintain coverage of drugs that were
listed on their formularies when beneficiaries signed up for the
plan. The legislation would permit plans to switch coverage from
a brand-name drug to a generic drug if it becomes available.
Snowe said, "It is unreasonable to ask seniors to accept
unexpected changes to their plans after they have spent so much
time and effort choosing one that suits their needs (CQ
HealthBeat, 2/8).

3. Medicare Set To Begin Coordinated Care Pilot Program

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CMS last week announced it has enrolled 100,000 Medicare
beneficiaries in a pilot program to test a coordinated care
system for individuals with multiple chronic conditions, the
Wall Street Journal reports. CMS says that individuals with five
or more chronic conditions make up 23% of Medicare beneficiaries
but account for 68% of costs. Such patients are often "under the
care of multiple specialists who don't communicate, share
medical records or coordinate treatment plans," increasing the
risk that they will "be hospitalized when different doctors
recommend conflicting treatments or take care of one condition
while letting another go unattended," the Journal reports. The
pilot program will "test whether a new layer of care can
actually reduce costs in the long run," the Journal reports. CMS
will pay eight companies -- including Aetna, Cigna, Health
Dialog and Healthways -- monthly fees to coordinate the
beneficiaries' care. Most of the companies will use nurses
working from call centers, and some will make house calls to
check on patients. The companies will have to refund some or all
of the fees if they do not cut 5% of costs and show that
beneficiaries are healthier and more satisfied with their
quality of care. James Pope, chief medical officer at
Healthways, said, "We aren't trying to insert ourselves into the
doctor's role of creating a care plan, but we are educating and
empowering patients by asking them if they know that two
medications they are taking are the same thing." However, "many
doctors say using third-party disease-management companies to
monitor patients from afar isn't as effective as having a single
doctor oversee care," the Journal reports. Christine Cassel, CEO
of the American Board of Internal Medicine, said, "By paying
other people to provide motivation to patients and coordinate
care, Medicare is adding an unnecessary layer of extra
bureaucracy and expense in a system that needs to help
underwrite better functioning physician practices" (Landro, Wall
Street Journal, 2/8).


4. New York Times Examines Decreasing Number of Employers
Offering Retirees Health Benefits

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The New York Times on Thursday examined how large U.S.
corporations are "reducing the burden of caring for retirees" by
cutting pensions and health benefits so that they can "compete
against foreign companies with lower benefits costs and domestic
rivals with younger work forces and less generous benefit
packages." Longer-living retirees and new accounting rules are
"forcing companies to more honestly reflect their full costs on
their books," which makes "the corporate-sponsored social
contract" to care for workers as they age "no longer
sustainable," according to the Times. Many of the nation's large
companies, such as General Motors and IBM, recently have taken
steps to close their pension plans or retiree health benefits
packages to new employees, instead offering "fixed contributions
to individual retirement accounts and health care packages
limited to active workers," the Times reports. According to an
annual survey by the Kaiser Family Foundation and Health
Research and Educational Trust, the percentage of companies with
200 or more workers that offered some form of health care
benefits for retirees decreased from 66% in 1988 to 33% in 2005.
Private companies that do still offer pensions and retiree
health plans often have union contracts or legal obligations
that do not allow them to drop the benefits, according to the
Times. Many of them have been downsizing their plans in recent
years, according to the foundation survey. Meanwhile, many
workers "are rolling with the punches," given "all the flux in
today's corporate environment," the Times reports. A 2004
Employee Benefit Research Institute survey found that only 5% of
workers think of retiree health care as their most important
benefit, while 4% believe a pension is the most important, and
9% of respondents rank either of the two benefits in second
place (Porter/Williams Walsh, New York Times, 2/9).


In related news, United Auto Workers members are continuing to
protest the union's 51% approval of a new health care agreement
negotiated with Ford Motor, the Detroit Free Press reports. Some
workers say that there were voting irregularities and argue that
retirees should have been allowed to vote. About 12 dissenting
members have filed an internal official appeal with the UAW, and
a lawsuit has been filed in U.S. District Court in Detroit
objecting to the agreement. Some who oppose the deal also have
been circulating a petition at Ford plants across the U.S.,
asking that the vote be nullified. The petition will be used to
lend support to the internal UAW appeal. UAW attorney Ellis Boal
said he expects union president Ron Gettelfinger to decide soon
how the complaint will proceed. Boal said his investigation into
the vote showed that the agreement was passed by only 90 votes
nationwide (Webster, Detroit Free Press, 2/9).


5. Many Doctors Have Not Returned to New Orleans After Hurricane

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The New Orleans Times-Picayune on Wednesday examined the
difficulties of tracking down physicians who evacuated New
Orleans during Hurricane Katrina and of bringing physicians back
to the city to practice. As many as 4,486 doctors, including
1,270 residents in training, were displaced from Jefferson,
Orleans and St. Bernard parishes in the immediate aftermath of
the hurricane, according to a University of North Carolina
study. Meanwhile, the region's doctor population currently is as
low as 1,200, according to the Orleans Parish Medical Society.
Post-storm Web sites like Whereismydoctor.org and Findladocs.com
have facilitated some doctors reconnecting with their patients,
but "hundreds of doctors remain unaccounted for," the
Times-Picayune reports. Many doctors say that Small Business
Administration loans are not enough to bring doctors with
private practices back to New Orleans because of uncertain
financial factors. Some physicians and hospital administrators
say Congress should add New Orleans to federal programs that
provide guaranteed salaries to physicians willing to work in
areas that have trouble recruiting doctors. Such programs help
doctors pay back medical school loans and offer income subsidies
for those who operate private practices (Darce, New Orleans
Times-Picayune, 2/8).

6. Feres Doctrine Prevents Military Personnel From Filing
Medical Malpractice Claims

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The Honolulu Advertiser on Tuesday examined the Feres Doctrine,
a federal regulation under which active-duty military personnel
are prohibited from suing the U.S. government for injuries
related to military service, even if the injury occurred while
the victim was off duty or was not caused by military personnel.
According to the Advertiser, active duty military personnel are
prevented from filing such lawsuits -- including for medical
malpractice -- "even if gross negligence was the cause." Both
critics and supporters of the doctrine say the justification
behind it is logical because officers during wartime should not
have to worry about whether or not they will be sued. However,
critics of the doctrine say that banning lawsuits for
non-combat-related injuries denies military personnel basic
legal rights. Some judges have criticized the doctrine, "even
calling it unconstitutional," but have been forced to dismiss
lawsuits because of it, the Advertiser reports. Meanwhile, the
House in recent decades has passed several bills to allow
military personnel to pursue lawsuits regarding injuries caused
by improper medical care, but the legislation has failed to win
approval in the Senate. In 2002, Veterans Equal Rights
Protection Advocacy submitted to a Senate committee more than
150 cases in which military personnel or their families were
unable to pursue claims because of the doctrine. "All we're
looking for is accountability," Barb Cragnotti, legislative
coordinator for the group, said, adding, "Because of that
doctrine, there is no accountability" (Perez, Honolulu
Advertiser, 2/7).

7. Dallas Morning News Looks at Switzerland's Health System

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The Dallas Morning News on Tuesday examined the health care
system in Switzerland, where every resident is required to buy
health insurance, and those who do not purchase insurance face
"stiff penalties." Swiss insurance companies and providers each
year negotiate health care prices, which then are reviewed and
approved by local Swiss governments, the Morning News reports.
The government sets price controls, according to the Morning
News. An average family of four pays about $680 a month in
premiums. Swiss insurers charge a premium for each family
member, with children having a lower premium than adults. The
government subsidizes premiums for lower-income individuals.
Deductibles and copayments for the Swiss are comparable to those
in the U.S., the Morning News reports. Besides selling other
plans, Swiss health care insurers must offer a basic health care
plan priced without regard to risk, and they cannot make a
profit from it. The companies compete with each other by
offering various deductibles and supplemental benefits,
according to the Morning News. Average annual premiums for
family coverage under the basic plan are about $8,167. U.S.
families with employer-based health coverage contribute an
average of $2,713 in yearly premiums for family coverage,
according to a survey by the Kaiser Family Foundation and Health
Research and Educational Trust. U.S. employers contribute an
average of $8,167 for family coverage, for a total of $10,880 a
year, the survey says. Health care spending in Switzerland
averaged $3,781 per person in 2003, compared with $5,635 per
person in the U.S. Switzerland spends a larger percentage
(11.5%) of its national income on health care than any other
country besides the U.S., which spends 16%. "People in
Switzerland realize what [health care] costs do to American
business, and they don't want to add to the anti-competitive
burden of Swiss businesses in the global economy," Felix
Gutzwiller, a doctor who heads the University of Zurich
Institute for Social and Preventive Medicine, said. He added
that Swiss citizens "do not want employers to get so much into
their private life and lifestyle." While many Swiss believe the
quality of medical care in their country "is among the best in
the world," others say the health system has to high of prices
and encourages people to remain in hospitals longer than
necessary, and insurers offer too many "bewildering choices,"
the Morning News reports. Gaudenz Silberschmidt, head of the
international affairs division of the Swiss Federal Office of
Public Health, said, "Theoretically, it's consumer-driven. But
practically, no," adding that insurers "offer thousands of
different premium plans, and when it's that many, it means it's
not transparent" (Landers, Dallas Morning News, 2/7).


8. Attorneys for Maryland Legal Immigrant Children Dropped From
Medicaid Can Petition Court for Care, Maryland Court of Appeals

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The Maryland Court of Special Appeals on Monday ruled that
attorneys of legal immigrant children removed from the state's
Medicaid program can petition the lower court to receive care
until their lawsuit is resolved, the Washington Post reports
(Otto/Marimow, Washington Post, 2/8). In the lawsuit, the
families of 13 legal immigrant children alleged that Maryland
discriminated against non-U.S. citizens by cutting a $7 million
Medicaid program that provided health benefits for pregnant
women and about 4,000 children who are legal, permanent
residents. Gov. Robert Ehrlich (R) later reinstated coverage for
pregnant women enrolled in the program. In January, Montgomery
County, Md., Circuit Court Circuit Judge Durke Thompson granted
a preliminary injunction to reinstate health benefits for the 13
immigrant children, but the Maryland Court of Special Appeals in
January stayed the order (Kaiser Daily Health Policy Report,
1/26). The three-judge Court of Special Appeals panel, after a
short hearing, said that Legal Aid attorneys who represent the
children can petition the circuit court judge on a case-by-case
basis to receive care until the case is resolved, according to
the Post. Chief Judge Joseph Murphy said he does not "think
[Maryland] is going to crumble if the kids get medical care" for
the next month, when the case is expected to be resolved.
Officials said the case would most likely go before the
appellate court by early April (Washington Post, 2/8).


9. Illinois Hospitals React to Attorney General's Proposed
Guidelines for Tax-Exempt Status

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Illinois hospitals on Tuesday started an "aggressive defense"
of their tax-exempt status, in reaction to state Attorney
General Lisa Madigan's (D) proposal to require all
not-for-profit hospitals to spend at least 8% of operating costs
on health care for indigent patients, the Chicago Tribune
reports. Madigan's proposal has made Illinois the "latest
battleground in a national debate over whether not-for-profit
hospitals do enough charitable work to justify their exemption
from most taxes," the Tribune reports. Ken Robbins, president of
the Illinois Hospital Association, said, "We are adamantly
opposed to a one-size-fits-all formula," which he said would not
account for "all the benefits hospitals provide." IHA said that
based on preliminary survey results from 86 facilities Illinois
hospitals provide $3 billion annually in benefits to their
communities. Robbins said 33% of Illinois hospitals are losing
money, and 45 additional hospitals will begin losing money if
Madigan's proposal is enacted. In addition, the Metropolitan
Chicago Healthcare Council on Tuesday released a report finding
that 43 hospitals in Cook County provided $113.3 million in no
cost hospital care in fiscal year 2005 and incurred $536.8
million in bad debt from patients. Public hospitals were not
included in the MCHC report. The total value of community
benefits from Cook County hospitals was estimated to be $1.6
billion, according to the report. Nancy Kane, a professor at the
department of health policy and management at the Harvard School
of Public Health, said, "Yes, hospitals are doing wonderful
things that communities value. That's not the question. The
question is, what do tax-exempt hospitals do different from
taxpaying institutions that supports their special status?"
(Graham, Chicago Tribune, 2/8).


10. Report Examines Idea That Increased Spending Improve Health
Care Outcomes

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"Is Technological Change in Medicine Always Worth It? The Case
of Acute Myocardial Infarction," Health Affairs: The report --
by Jonathan Skinner, an economics professor at Dartmouth
College; Douglas Staiger, also a Dartmouth economics professor;
and Elliot Fisher, a professor of medicine and of community and
family medicine at Dartmouth Medical School -- attempts to
reconcile views on whether increased spending on medical care
improves outcomes. It examines data from 1986 to 2003 on
mortality and spending for Medicare beneficiaries with acute
myocardial infarction and suggests a new approach to determining
the value of technology and increased health spending (Skinner
et al., Health Affairs, 2/7). Separate perspective pieces by
David Cutler, a professor of applied economics and dean of
social sciences at Harvard University, and Alan Garber, a staff
physician at the Veterans Affairs Palo Alto Health Care System
and a professor and director of the Stanford University Center
for Health Policy and Center for Primary Care and Outcomes
Research, are available online.


11. Editorials, Opinion Pieces Address Recent Actions on Federal

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Several newspapers recently published editorials and opinion
pieces addressing President Bush's proposed fiscal year 2007
budget and the FY 2006 budget he signed Wednesday. Summaries
appear below.


*Des Moines Register: President Bush "wants to freeze Medicare
payments to hospitals, hospices, nursing homes and home health
agencies," which "is in essence" a cut, "given the rapid
increases in the cost of providing medical care," a Register
editorial states. "[T]he absurdity of it all" is that "more tax
dollars are going to subsidize private insurance companies"
while "fewer tax dollars would be dedicated to paying for actual
care," the editorial adds (Des Moines Register, 2/8).

*San Francisco Chronicle: "Curbing the growing costs of Medicare
should be a worthy topic" for Bush to address, "[b]ut trimming
one aspect of the mammoth program without a bigger plan makes
little sense," a Chronicle editorial states, adding, "So does
the president's paltry suggestion to offer health savings
accounts, an idea that won't help the lower end of the
population with little money to spare." Although "[t]here are
other smaller parts to this budget worth noting," they "are
small consolations in a package that doesn't reflect fiscal
reality," the editorial continues (San Francisco Chronicle,

Opinion Pieces

*John Cogan, Glenn Hubbard and Daniel Kessler, Wall Street
Journal: Bush's plan "to expand health savings accounts ...
offer[s individuals] immediate relief from the high cost of
health care and the means for gaining more control over medical
decisions," Cogan, senior fellow at the Hoover Institution;
Hubbard, former chair of the president's Council of Economic
Advisers and dean at Columbia Business School; and Kessler,
senior fellow at the Hoover Institution and professor at
Stanford Business School, write in an opinion piece for the
Journal. According to the writers, "The president's proposals
will reduce health costs by expanding the tax incentives to
purchase insurance policies that have high deductibles and
coinsurance rates," while "correcting a fundamental flaw in
federal health policy" by applying a "tax exclusion to all
out-of-pocket expenses for covered health plan services." They
say, "Congress should also consider [Bush's] proposals to make
insurance more portable, test innovative methods of covering the
chronically ill and make the liability system fairer and more
predictable." The writers conclude, "The challenge of reforming
our health system will only grow more difficult the longer we
delay" (Cogan et. al, Wall Street Journal, 2/9).

*Derrick Jackson, Boston Globe: Although "President Bush said in
his State of the Union address, 'we strive to be a
compassionate, decent, hopeful society,'" the "next day, he and
his fellow Republicans ambushed the poor" with cuts to Medicaid
and Medicare in the FY 2006 budget that "are a prescription for
making the exploding crisis on health care much worse," Globe
columnist Jackson writes. According to Jackson, "The rich get
compassion and tax cuts," while "[t]he poor get no compassion.
They just get cut" (Jackson, Boston Globe, 2/8).

*Steven Pearlstein, Washington Post: "President Bush's health
care proposal gets it half right," Post columnist Pearlstein
writes. According to Pearlstein, "Moving the country toward
'catastrophic'-type insurance policies is indeed the way to go,
a necessary step in getting Americans to be more value-conscious
in their consumption of health care services," but "[w]here Bush
goes off the rails is arguing that health care savings accounts
are the best way to move the country toward a consumer-driven
health care system based on catastrophic insurance." He adds,
"In truth, they are an expensive, inefficient and regressive way
to accomplish that goal" (Pearlstein, Washington Post, 2/8).

12. Editorials, Opinion Piece Examine Medicare Prescription Drug

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Three editorials recently addressed the new Medicare
prescription drug benefit. Summaries appear below.

*Honolulu Star-Bulletin: "As foreseen, the elderly are dizzied
by a variety of drug plans with different premiums and covered
drugs thrust at them under [the] new Medicare prescription
program," a Star-Bulletin editorial says, adding that "changes
are sure to be needed in the months and years ahead." The
editorial concludes, "It is barely into its infancy, and a
clearer picture of its effect is likely to surface later this
year. Soaring drug prices in the past decade prompted calls for
relief by the elderly, and they will not be silent if the
program fails" (Honolulu Star-Bulletin, 2/7).

*St. Paul Pioneer Press: "President Bush has the right words and
the wrong prescription for Medicare savings" in his fiscal year
2007 federal budget request, a Pioneer Press editorial says.
Instead of Bush's plan to cut $36 billion from Medicare spending
over the next five years, "Congress should counteroffer savings
through fixing the already broken Medicare prescription drug
benefit that is vastly expanding entitlement spending without
reasonable price controls for taxpayers," the editorial states,
concluding that "when polls and constituent mail are showing
dissatisfaction with Medicare, revisiting the drug costs and
service decisions would be politically smart" (St. Paul Pioneer
Press, 2/8).

*Salt Lake City Deseret Morning News: "Capitalism benefits
people by allowing competition, which tends to reduce prices and
raise quality," but the Medicare drug benefit "should not be the
poster child for that concept," a Deseret Morning News editorial
states. The editorial concludes, "The principles of fair
competition remain solid. But it may be prudent for lawmakers to
look into ways to make prescription drug choices easier for
elderly patients to distinguish," because "[w]ith so-called baby
boomers on the doorsteps of retirement, widespread confusion
isn't likely to go away" (Salt Lake City Deseret Morning News,

Opinion Piece

Michael Hiltzik, Los Angeles Times: The new benefit's "plan
finder" tool is "burdened by numerous peculiarities and
complexities that render it almost useless for millions of
potential beneficiaries," columnist Hiltzik writes in a Times
opinion piece, adding that the confusion is one of many problems
that have surfaced since the benefit launched. Hiltzik says that
"with two years of preparation, there's no excuse for so many
'unexpected problems,'" concluding that "the fundamental flaws
in the program, including its potential for manipulation by
health insurance and drug industries, remain unaddressed. Until
that changes, the confusion and suffering will continue"
(Hiltzik, Los Angeles Times, 2/9).

13. Wal-Mart President/CEO Addresses Maryland Law Requiring
Large Employers To Spend Certain Amount on Health Benefits

Access this story and related links online:

Instead of closing stores in Maryland after the General
Assembly enacted a law requiring large employers to spend a
designated percentage of payroll on health care, "We'd like to
... send the people of Maryland a...message: We at Wal-Mart
stand by you," Lee Scott, president and CEO of Wal-Mart Stores,
writes in a Washington Post opinion piece (Scott, Washington
Post, 2/9). Wal-Mart is the only employer that the Maryland law
affects (Kaiser Daily Health Policy Report 2/8). "[W]e will not
flinch in our commitment to our customers, our associates and
the communities we serve," Scott writes, adding, "That's not to
say that the bill state legislators passed wasn't bad public
policy. It was." Scott continues, "[A]ny policy that singles out
large employers -- much less a single large employer -- ignores
the reality that businesses of all sizes are struggling to deal
with the soaring cost of health care in America. Still, we will
of course comply with the laws of Maryland." Scott writes, "With
other state legislatures considering bills that apply to more
and more companies in addition to Wal-Mart, we may find out [if
it costs jobs], and, unfortunately, the results won't be good
for working families." He adds, "We hope elected leaders at all
levels can agree that pitting large businesses against small
business, the private sector against the public sector, or one
group of Americans against another won't solve any of the
problems facing our country." Scott says, "The only way we're
going to tackle" the country's biggest issues is by "working
together" (Scott, Washington Post, 2/9).


The Kaiser Daily Health Policy Report is published for
kaisernetwork.org, a website of The Henry J. Kaiser Family
Foundation. (c) 2006 Advisory Board Company and Kaiser Family
Foundation. All rights reserved.

Jill Braden Balderas, managing editor, kaisernetwork.org
Beth Liu, web writer, kaisernetwork.org
Simone Vozzolo, web producer, HealthCast
Francis Ying, web producer, HealthCast
Amanda Wolfe, senior editor, Kaiser Daily Health Policy Report
Evonne Carroll Young, senior web writer, kaisernetwork.org
Shari Lewis, online communications associate, Kaiser Family
Sahar Neyazi, online communications assistant, Kaiser Family
Robin Sidel, communications officer, online activities, Kaiser
Family Foundation
Larry Levitt, editor-in-chief, kaisernetwork.org; vice
president, Kaiser Family Foundation
DAILY REPORTS PHONE: 202-266-6312; FAX: 202-266-5700; E-MAIL:
For questions and further information about kaisernetwork.org:
in-@kaisernetwork.org or 202-347-5270
kaisernetwork.org is a website of the Kaiser Family Foundation.
For access to the Foundation's policy research, analyses,
reports and fact sheets, and media partnerships, visit the
Foundation's main website at http://www.kff.org.
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