The contents of the Deficit Reduction Act will certainly spoil the mood of millions of Americans, especially those over 65. I can't think of a worse Christmas present. After all, this bill severely limits access to medical care for poor, low-income people and senior citizens. True, Congress did take into account the wishes of governors, who insisted on wide freedom in shaping their own public health policies. But it seems to me that Republicans in the House of Representatives have taken it too far, and this will return to haunt them in the 2006 midterm elections.
Medicaid
For all intents and purposes, the final version of the Deficit Reduction Bill puts an end to free Medicaid: the new law allows state governments to introduce premiums and co-payments for office visits, the purchase of medicine and for hospital treatment.
State governments will now have the ability to set limitations on various services provided within the Medicaid framework or to completely cancel them at their discretion. In the past, states were required to comply with federal instructions.
Strict penalties, up to exclusion from the program, are stipulated for non-payment of premiums and co-payments by Medicaid clients during the 60 days following care by doctors or in hospitals.
If Medicaid clients refuse to make a co-payment for services or procedures, pharmacy owners have the right to refuse to fill their prescriptions and hospitals are allowed to refuse them treatment.
According to Representative Joe Barton (R-TX), who backed that co-payments be introduced into law, the measure's time had come. Barton believes that thanks to the new law, clients will be forced to see fewer doctors.
Co-payments for a family of two are 10 percent of the cost of the service or procedure if the family's annual income is between $12,830 and $19,245. Above $19,245, co-payments will equal 20 percent.
Another clause in the new law that affects middle-class senior citizens (who have a home and moderate savings) restricts their ability to receive medical care in nursing homes at the expense of Medicaid.
If seniors decide to transfer real estate or cash to their children or close relatives in order to be able to stay in a nursing home, they will now have to wait longer for approval from Medicaid to pay for their stay.
And if the combined value of the house and financial funds at the senior's disposal exceeds $500,000, the senior – not Medicaid – will be responsible for paying for nursing home stays. True, states will have the right to raise this amount to $750,000.
But currently, the value of a house does not affect payment for nursing home stays in the majority of cases.
According to representatives from the Center for Long Term Care Reform, the changes in the law were introduced so that seniors would not treat Medicaid as a welfare program, but would buy long-term care insurance. As reported in The Wall Street Journal, only a small number of elderly people currently buy long-term care insurance for one simple reason – it is very, very expensive. The Center for Long Term Care Reform believes that the transfer to long-term care insurance is correct and hopes that the new rules will force elderly Americans to purchase this medical plan.
Indeed, the organization's position is understandable because, according to its founder and president Stephen Moses, much of its financing comes from insurance companies that offer long-term care insurance. As the saying goes, he who pays the piper calls the tune.
Medicare
The payment amount made to doctors treating Medicare patients will be frozen in 2006 – previously the amount was to have been reduced by 4.4 percent. Congress refused to take into account the objections of doctors, who, conversely, complained about the excessively low rates in the Medicare system. A possible consequence of this measure is that fewer health professionals will want to care for participants in this program.
The new law also stipulates freezing payments to agencies that provide home care for sick seniors, as well as an increase in premiums for Medicare clients who have high incomes.
Beginning in 2007, elderly people with an annual income of over $80,000 will have higher premiums for participating in Medicare Part B.
Starting in 2009, people with an income from $80,000.01 to $100,000 will pay premiums of $125 per month. Those whose income is less than $80,000.01 will send $89 per month to the treasury. For elderly Medicare clients whose income exceeds $200,000, the premium will be $286 per month.
According to the Congressional Budget Office, the adoption of the Deficit Reduction Act in the form it was approved by the Conference Committee in Congress, will allow the federal treasury to save $26.5 billion on Medicaid and $22.3 billion on Medicare over the next 10 years.
Unfortunately, as The New York Times reports, cost cutting measures in financing the government's two main programs will occur exclusively at the expense of poor people and seniors. The Republicans who control Congress have decided not to infringe on the rights of pharmaceutical giants and insurance companies, whose policies contribute to the unrestrained growth in the cost of medical care. More precisely, they just did not want to.
It is hard not to agree with my fellow party member Senator Jeff Bingeman (D-NM) that "the public health policy of Republicans, who have decided to save on medical benefits for children and who have saddled poor people and seniors with the additional financial hardship of co-payments, is distressing."
The American Association for Retired Persons (AARP) also had harsh criticism for the final version of the Deficit Reduction Act.
"This law, which safeguards pharmaceutical giants and the insurance industry, has punished the most defenseless Americans – the poor and the elderly," said William Novelli, one of AARP's directors.
Such a stinging reaction from AARP is a very serious – I would even say threatening – warning to Republican leaders in Congress. Let's not forget that voters over 65 are the most disciplined electorate. It is they, and not the youth, who line up to vote.
The commentary of Lawrence Davidow, president of the National Academy of Elder Law Attorneys, which appeared in The New York Times, is the first sign of a backlash connection.
"I am simply stunned by the decision of lawmakers who insisted on the adoption of the Deficit Reduction Act. They are simply turning their backs on middle-class seniors who had hoped to pay for their stay in nursing homes with Medicaid. Now, if they want to be treated at such an institution for an extended period, they can be required in return to give up their house and everything that they have acquired during their working life as compensation," said Davidow.
After hearing this, you don't have to be Cassandra to predict that the Republicans could find themselves in a serious bind come fall of 2006. The elderly electorate, as noted in the past, does not forgive a wrong.
