Joseph R. Antos, Ph.D. Wilson H. Taylor Scholar in Health Care and Retirement Policy American Enterprise Institute Health Legislation 2008: Waiting for Next Year? Health Care Forecast Conference University of California, Irvine February 21, 2006

2 Pelosi Reid Who’s running Congress?

3 How lame is that duck? Opposition party controls Congress Lowest approval levels in 8 years Not a political asset for many R’s Focus on foreign affairs—refuge of a lame duck BUT SURPRISINGLY ACTIVIST Bush has turned weaknesses into strengths

4 Just say “NO” George W. Bush’s vetoes 2,006 days without a veto—new record! 7/19/06 – Stem cell 5/1/07 – Iraq war funding 6/20/07 – Stem cell 10/3/07 – SCHIP 11/13/07 – Labor/HHS appropriations 12/12/07 – SCHIP Democrats unable to override

5 Sharp acceleration in 2007 Vetoes/Day X 100 Veto Democrats control Congress

6 Bush budget themes Health system reform  Standard tax deduction  Promote insurance market competition  Liability reform  State experimentation Medicare  Slow program spending growth  Protect Medicare Advantage  P4V  Transparency and individual responsibility Medicaid and SCHIP  Fiscal responsibility, accountability  Focus SCHIP on kids <200% FPL

7 Big Medicare cuts Proposed Medicare Cuts (5-year cost estimates) 09 BudgetWith SGR fix Roughly on a par with BBA97 (-$116.4 B, ) -$182.7 B-$247.7 B

8 Unrealistic assumptions Automatic SGR cuts retained Hard freezes on FFS providers thru 2011 Significant provider cuts post Hospital DSH cut 30% over 2 years Income-related Part D premium Medicare Advantage rates not cut directly… except for medical education payments to MA

9 SCHIP surprise Proposed Medicaid, SCHIP Changes (5-year cost estimates) MedicaidSCHIP +$18.7 B -$18.1 B

10 Challenge for Congress Probably cannot get to the wish list  MA cuts  Direct price negotiation for Part D  Comparative effectiveness  Follow-on biologics  Surprise possibility: SCHIP Key problems must be addressed  SGR  Ds anxious to overturn new Medicaid rules Veto threat remains strong  Continuing resolution for 2009?

11 Congress takes on the tough issues