January 21, 2011

House Repeals Health Reform

This week, the House of Representatives, by of vote of 245-189, passed the "Repeal the Job-Killing Health Care Act" (H.R. 2) . The legislation passed by the House repeals the Affordable Care Act enacted by Congress and the Obama Administration. All House Republicans voted yes on the "Repeal the Job-Killing Health Care Act" and were joined by 3 House Democrats.

The repeal measure passed by the House instructs relevant House Committees to draft legislation to replace the Affordable Care Act. Included in the instructions to key committees was a provision directing committees to develop a permanent fix to the sustainable growth rate formula (SGR).

Attention now turns to the Senate, which is controlled by the Democratic party, Senate Majority Leader Harry Reid (D-NV) has made it clear that he does not intend to let the repeal legislation come to the Senate floor for a vote. Republican Majority Leader Eric Cantor (R-VA) has challenged Sen. Reid to bring the bill to the Senate floor to prove that Democrats have the votes to prevent repeal.

While there was considerable political theather surrounding the House repeal vote, the House is not finished with debating the merits of the healthcare bill. The House Republican leadership has made it clear that they intend to continue the debate by attempting to force votes on specific items of the bill, force votes to scale back the legislation, delay its implementation and defund the law through the appropriations process."

Health policy experts are also keeping a close eye on the courts. Several states have challenged the constitutionality of the Affordable Care Act requiring a number of U.S. citizens to buy private health insurance or pay a tax penalty. While a Michigan Court and a lower Virginia court have determined the provision to be constitutional, a higher Virginia court has ruled against the Affordable Care Act and a Florida court is expected to rule against the Affordable Care Act in the near future. Many observers predict the Affordable Care Act will eventually be decided by the U.S. Supreme Court.

BUDGET

House Republican Group Proposes Steep Federal Funding Cuts

This week, the bicameral Republican Study Group (RSG), chaired by Rep. Jordan (R-OH) and Sen. DeMint (R-SC), unveiled a legislative proposal to cut $100 billion in non-defense spending from the federal budget, with cuts targeted to begin in FY2011. These cuts would translate to funding reductions of about 30% for federal agencies, including the Department of Health and Human Services. The proposal also aims to eliminate all funding for implementation of the healthcare reform law, the Affordable Care Act.

The RSG proposal has outlined even steeper cuts for FY2012 and beyond, with an aim of setting spending levels back to FY2006 levels for non-defense programs, and additionally, cutting the federal workforce by 15%. An area targeted for significant reductions is the Medicaid program, where $16.1 billion would be cut over 10 years, placing a higher burden on states to fund the program. No biomedical research programs are slated for cuts as yet. Some of the over 100 programs outlined for significant reductions or outright elimination include:

" $1.39 billion cut to the U.S. Agency for International Development (USAID)
" Elimination of subsidy to the U.N. Intergovernmental Panel on Climate Change
" $1.3 billion in cuts to programs at the Department of Education

The RSG is a group of 165 members, so technically is represents the majority of House Republicans. However, the RSG proposal is at odds with what the chairman of the House Budget Committee Rep. Ryan (R-WI) has proposed for FY2011, which is $60 billion. Rep. Ryan's proposal would cut federal agencies by about 15%, beginning in FY2011. The House has scheduled a vote for next week on a measure to fund government programs for the remainder of FY2011, so the leadership will have to decide which budget cap to move forward with.

Although the RSC proposal is not expected to gain enough support in the Senate to move forward in that chamber, the stage is set for reductions in non-defense spending, which includes health research and services programs that the ATS monitors, such as the NIH and CDC, beginning with the measure that will fund government programs for the rest of FY2011. The ATS would also be particularly concerned about the impact of the proposed $1.3 billion cut to USAID on global tuberculosis control programs.