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Undermining Our Crumbling Health Care System
As the number of people in this country who lack health care continues to grow, the need for health reform has never been greater. Yet the President's budget proposal would only further destabilize our already fragile health care system by cutting health care funding for the young and old alike, the poor, the disabled, and those who live in rural areas, as well as threatening health care for those who get their health insurance through their employers. Despite these massive cuts to health programs for vulnerable populations, the President still manages to propose tax cuts that would primarily benefit the wealthy.
Together, the Medicare and Medicaid programs provide critical health care for nearly 50 million elderly, low-income, and disabled women.1 Instead of providing funding to adequately support these programs that provide vital health care to the most vulnerable Americans, the President would instead cut a combined total of more than $200 billion from the Medicare and Medicaid programs over the next 5 years.
Arbitrary across-the-board provider cuts in Medicare would slash payments to hospitals, nursing homes and home health care providers. These actions would do little more than reduce access to health care for American seniors; the reasons for health care inflation are complex, and merely cutting reimbursement rates does nothing to address the underlying causes of rising health care costs. Moreover, the President's budget protects "Medicare Advantage" (MA) plans from these cuts, despite the fact that the private insurers participating in this program are overpaid by an average of 13 percent.2
At a time when states are facing significant budget deficits and increased Medicaid enrollment due to the declining economy, the President's budget would cut Medicaid by $1.9 billion this year alone and more than $17 billion over 5 years. This would be accomplished primarily through shifting costs to the states by arbitrarily cutting the federal Medicaid reimbursement rate for several programs, such as those providing case management and administrative services. Among the proposals: a $570 million cut this year alone for the highly successful Medicaid Family Planning Services program, putting these critical services at risk for millions of low-income women (see discussion below). These cuts are exacerbated by damaging regulatory changes announced by the administration that would further cut funding for vital Medicaid health care services.3 In the face of these arbitrary cuts, states will be left with difficult choices: try to find new funding in the face of climbing budget deficits, cut important health care benefits, or cut recipients from their programs.
The budget plan looks to the tax code to try to address our health system woes, and merely recycles proposals from last year's budget that would provide the most assistance to the wealthiest taxpayers.
The President again proposes last year's health-related tax cut proposal that could threaten employer sponsored health insurance for millions of people, further destabilizing our health care system. This proposal would cost more than $98 billion over the next five years, and would primarily benefit the wealthiest taxpayers, yet would do little if anything to help low-income families-who comprise nearly two-thirds of the nation's uninsured -obtain quality affordable health care.
Furthermore, by eliminating the tax incentive that employers receive for providing health insurance to their employees, it could cause the loss of employer-sponsored health care, leaving many people with no option but to try to buy health insurance through the individual market, which is typically more expensive than employer-sponsored health coverage - especially for women and people with pre-existing health conditions.
This proposal once again champions Health Savings Accounts (HSAs), which would push more individuals into high-deductible health plans with fewer covered services and higher out-of-pocket costs. Studies have shown that HSAs tend to primarily benefit individuals with higher incomes and better overall health and that these accounts are more often used as tax shelters by wealthy individuals.4 , 5 Women are at a particular disadvantage in an HSA arrangement; compared to men, they need more health services throughout their lives and spend more of their income on out-of-pocket health care costs.6
While the President claims in his budget to have increased funding for the State Children's Health Insurance Program (SCHIP), the amount provided is not sufficient to support those currently enrolled in this program for the full five years. The President's budget increases funding for CHIP by $19 billion over 5 years- but full funding to support those currently enrolled through 2013 will require $21.5 billion.7 Furthermore, the plan provides no additional funding to provide health care for uninsured children who are eligible for, but not yet enrolled in, CHIP.
The President's budget once again shows his misplaced priorities by cutting funding for programs that provide critical reproductive health care for millions of women.
The budget would slash funds for family planning services provided through Medicaid by $570 million this year alone, a proposal that would leave millions of low-income women without contraceptives and other basic family planning services. At a time when 17 million women are in need of publicly-funded contraceptives, the President's devastating cuts will make it harder for low-income women to plan their families, protect their health, and improve their lives.8
The proposed budget also fails once again to provide needed funding increases for the Title X program, the only federal program dedicated to providing contraceptive care and other basic preventive services to low-income women. Had Title X funding kept pace with medical inflation since 1980, it would now be funded at more than $700 million--instead of the $300 million the Administration has now proposed.9
Finally, the budget's continued commitment to failed abstinence-only programs is further evidence of the Bush Administration's misplaced priorities. The President's budget proposes a total of $204 million for abstinence-only programs, programs that promote gender stereotypes, censor life-saving information about condoms and contraceptives, and undermine young people's confidence in contraception when they do become sexually active. Since 2002, $1.08 billion has gone to abstinence-only programs, despite mounting evidence that these programs distort facts and fail to prevent teen pregnancies or sexually transmitted diseases.10
The President's budget hands rural families a particularly bad deal. Difficulties accessing health care in rural areas have long been documented, yet the President's proposal would decimate funding for programs designed to improve health care in rural areas by 87 percent or $150 million.
At a time when many areas face critical shortages of health providers, including a dearth of professionals in nursing, the President's budget would devastate the health professions training programs with a cut of almost 90%, or $557 million, in 2009. This includes eliminating funding for graduate medical education in children's hospitals.
The President once again proposes a 10 percent reduction in funding for the Department of Health and Human Services' Office of Women's Health, which works to address and reduce inequities that have historically placed the health of women at risk, including inequalities in health research, the provision of health care services, and educational opportunities.
Footnotes
(1) Kaiser Family Foundation, Medicaid's Role for Women (2007). Available at: http://www.kff.org/womenshealth/upload/7213_03.pdf; Medicare Payment Advisory Commission (MedPAC), Medicare Beneficiary Demographics (2006). Available at: http://www.medpac.gov/publications/congressional_reports/Jun06DataBookSec2.pdf
(2) Medicare Payment Advisory Commission (MedPAC), Private Fee-for-Service Plans in Medicare Advantage (2008). Available at: http://www.medpac.gov/documents/MedPAC_Jan08_testimony_PFFS.pdf
(3) National Association of State Medicaid Directors, Proposed 2008 Medicaid Regulations (2007). Available at: http://www.nasmd.org/home/doc/Regulations08.pdf
(4) Steffie Woolhandler and David U. Himmelstein, "Consumer Directed Healthcare: Except for the Healthy and Wealthy It's Unwise," Society of General Internal Medicine 22: 879-881. (2007).
(5) Government Accountability Office, "Consumer-Directed Health Plans: Early Enrollee Experiences with Health Savings Accounts and Eligible Health Plans," GAO-06-798 (August 8, 2006).
(6) E.M. Patchias and J. Waxman, Women and Health Coverage: The Affordability Gap (2007). Available at: http://www.nwlc.org/pdf/NWLCCommonwealthHealthInsuranceIssueBrief2007.pdf
(7) Greenstein, Horney, Kogan, Center on Budget & Policy Priorities, "The Dubious Priorities of the President's FY 2009 Budget," (February 4, 2008). Available at: http://www.cbpp.org/2-4-08bud2.htm
(8) Guttmacher Institute, One Million New Women in Need of Publicly Funded Contraception, The Guttmacher Policy Report, Vol. 9, No. 3 (Summer 2006). Available at: http://www.guttmacher.org/pubs/gpr/09/3/gpr090320.html#table1
(9) The Alan Guttmacher Institute, Memo (February 12, 2007).
(10) SIECUS, Spending for Abstinence-Only-Until-Marriage Programs (1982-2008)(6006). Available at: http://www.siecus.org/policy/states/2006/federalGraph.html
