Medicaid stalemate, pay-for-delay ban among health care items under debate

Jul 14 2010

The Wall Street Journal: "Several states are preparing to make deep cuts to Medicaid as a federal stalemate over funding for the poor drags on—even as states face mandates to expand the program under the new health-care law." Efforts to extend provisions of the stimulus programs that provided extra federal money to state Medicaid programs remain in limbo; the enhanced funding is set to expire at the end of the year. But governors dealing with recession-ravaged budgets say they need the higher federal match for Medicaid funds through the end of their fiscal years — which for most states is next June 30. "With the antispending mood building in Washington, governors say they are increasingly skeptical that such an extension, needed to prop up the program starting next year, will come." States are laying plans to cut hundreds of thousands of Medicaid enrollees and cutting services such as dental care and some over-the-counter medications.

But states also risk losing their remaining federal Medicaid dollars if they cut eligibility for enrollees. "The health-care overhaul signed into law in March imposes eligibility requirements for federal funding. The law will add 16 million Americans to the 60 million on Medicaid starting in 2014, leaving states to cut a program while they are planning for its largest expansion in years" (Adamy ,7/13).

CQ HealthBeat: "Cash-strapped states that included the money in their state budgets with no backup plan are stuck with their decision. … While the current pot of emergency Medicaid money doesn't run out until Dec. 31, most states started their new budget years on July 1 and under state laws must ensure their budgets are balanced." Some states may begin soon laying off workers and/or bringing back state lawmakers to revisit budgets (Norman, 7/12).

In the meantime, The Hill reports that another piece of legislation — the war supplemental spending bill — includes a pay-for-delay ban that would restrict drugmakers from paying competitors to keep generic versions of their drugs off the market. "The so-called 'Pay for Delay' provision would strengthen the Federal Trade Commission's ability to restrict the practice. The Congressional Budget Office estimates this would save the federal government more than $2.4 billion over 10 years in lower drug costs for Medicare, Medicaid, military and veterans' health programs; a 2009 study found that such a ban would save American consumers $35 billion over 10 years. … [The] House bill would require higher rebates from drug makers who participate in Medicaid, saving the federal government $2.1 billion over 10 years. The provision affects inhalation, infusion and injectable drugs dispensed outside pharmacies and was included in the [jobs] bill that failed in the Senate before the July recess" (Pecquet, 7/12).

In other Capitol Hill news:

Roll Call: Republicans Monday approved the nomination of a federal district judge for Illinois, despite taking to the Senate floor to hammer the recess appointment of Dr. Donald Berwick to head Medicare. Minority Leader Mitch McConnell "noted that Berwick did not sit for a confirmation hearing before he was cleared, and he promised the recess appointment 'has only reignited the debate over the Democrat health care plan.'" Republicans said they will likely begin new messaging on the health overhaul in light of Berwick's appointment. "A handful of other Republicans filed to the floor to expand on McConnell's outrage" (Brady, 7/12).

The Hill, in a separate story: Rep. Eric Cantor, R-Va., continued his push to repeal the health law Monday. "'What we'll do is continue to say, "We've got to repeal the stuff in this bill,"' the minority whip said on CNBC's Squawk Box. 'We've got to repeal the bill and replace it, though, because no one's accepting the status quo. OK? So repeal this bill.' The comments are the latest indication that, despite polls indicating a rising popularity for the reforms, Republican leaders intend to pound away at the law on the campaign trail this year in hopes that the GOP's unified opposition will win them seats in the midterms" (Lillis, 7/12).

And Politico is reporting that John J. Castellani, who has headed up the Business Roundtable, was named today as the new president and CEO of PhRMA. "PhRMA (the Pharmaceutical Research and Manufacturers of America) made the announcement Tuesday morning, saying Castellani would take over as of September 1" (Frates, 7/13).