The details on this emerging deal on various expiring measures are getting worse by the minute. Here’s what we know:
The $150 billion bill, extending the payroll tax cut, some extended unemployment insurance benefits and the “doc fix” on Medicare reimbursement rates, will only require $50 billion in offsets. The payroll tax cut won’t get offset at all. But what are the offsets being discussed? An auction of wireless spectrum, the sale of a public asset; forcing federal employees to contribute more money toward their pensions, which amounts to a wage cut for those 2 million workers; and a series of health care cuts, including trims to the health care law’s prevention fund:
• A $5 billion cut to the health law’s $15 billion prevention trust fund;
• The elimination of $2.5 billion in enhanced Medicaid payments to Louisiana in the wake of Hurricane Katrina;
• A $4 billion reduction in so-called Medicaid Disproportionate Share Hospital (DSH) payments to hospitals that take care of people without insurance;
• A $6.8 billion reduction in federal payments to hospitals that collect “bad debt” from insolvent patients, down to 60 percent; and
• Cuts to how much Medicare pays for clinical laboratory tests.
The prevention fund cuts are pretty severe, a 33% reduction. This was a fait accompli when the President’s own budget included a $4 billion cut to the fund. But the proposal goes a bit further. Remember that we’re in the middle of a debate about birth control access. That’s one of the free preventive services guaranteed in the Affordable Care Act. Yet this prevention fund, which could bring similar benefits to preventive services, is getting raided. Sarah Kliff explains:
The University of Richmond’s Rick Mayes and Thomas Oliver of the University of Wisconsin recently shed some light on why, despite getting a lot of lip service, prevention tends to be a political lightweight. In last month’s Journal of Health Politics, Policy and Law, they noted four reasons why efforts to prevent or reduce costly diseases run up against a host of political obstacles. A lot of it has to do with the fact that when prevention works best, you don’t see it. If a disease is prevented, there’s not much concrete for a legislator to point to. This is what Mayes describes as the “Prevention Paradox:” “If public health measures are effective, the problems they are aimed at are often solved or never even materialize, thereby making them virtually invisible [...]
Another big obstacle, he writes, has to do with timing: Prevention tends to show its effect in statistics, over long periods of time, as smoking rates might go down or vaccination rates go up. Those delays may be inherent to how public health works, but they also make it hard for a legislator running for office a year or two from now to campaign on.
So because we haven’t seen immediate results from the prevention fund, it will get raided, which was utterly predictable. And ultimately this will mean higher health care costs, if preventable diseases never get arrested by the fund.
And then there are the unemployment program changes, which would indeed reduce weeks of eligibility and even allow states to mandate drug testing for beneficiaries:
The maximum duration of unemployment insurance would gradually fall from 99 weeks to 73 weeks over the course of the year under the payroll tax deal sought by congressional negotiators, according to an outline of the proposal circulating among Democrats. A Republican aide said the deal would allow states to drug test those applying for unemployment benefits.
The GOP aide said the deal would overturn a federal law that prevents states from screening and then drug testing people who apply for unemployment insurance. States would be permitted to screen claimants who lost their jobs because they failed or refused a drug test and people seeking new jobs that generally require drug tests. According to a 2006 survey cited by Republicans, 84 percent of employers required new hires to pass a drug test [...]
If Congress agrees to this new deal, the maximum duration of benefits would remain 99 weeks through May. Compensation currently lasts that long in 22 states, according to the Center on Budget and Policy Priorities, a liberal-leaning Washington think tank. Nearly 2 million people have been out of work for that amount of time or longer as of January.
The maximum duration of unemployment insurance would ratchet down to 79 weeks after August, and then fall to 73 weeks after December. Republicans wanted benefits chopped down to 59 weeks, while many Democrats said the duration should stay at 99. A Republican aide said only states with jobless rates above 9 percent would be eligible for 73 weeks; jobless people in states with lower rates could receive at most 63 weeks.
So the 99ers would go extinct in May, and by the end of the year the maximum benefit in the hardest-hit states would settle at 73 weeks. This was going to happen, because Democrats didn’t fix the “look-back” in December with the two-month increase to unemployment benefits, which meant that states with improving jobs pictures were going to lose an extra 20 weeks of benefits (this already happened in Michigan and Maine). I’m not sure if that long off-ramp down to 73 weeks is acceptable or not to advocates. Further, what happens in the event of an unexpected downturn in economic fortunes? And how many Americans will this cutback in benefits impact?
Those are the key questions to ask, but the dominant policy desire here looks to be to get something done, regardless of the impact on federal employees, the humiliation of newly-drug-tested jobless workers, and the detriment to our health care system.