AFSCME LEGISLATIVE REPORT February 29, 2008

[Omaha Steve]

Below are the top stories of the week from Capitol Hill.

In this issue:

* Governors Urge Congress to Stop Costly Regulations in Health Programs
* Senate Passes Indian Health Bill with Delay on Medicaid Case Management Regulation
* GAO Questions Benefit Package in Privatized Medicare Plans
* President Bush Proposes Raising Medicare Drug Premiums for Retirees
* Call Congress Tuesday, March 4th to Increase Child Care Funding!
* Comprehensive Child Welfare Reform Bill Introduced in House

Governors Urge Congress to Stop Costly Regulations in Health Programs
The House Energy and Commerce Committee's Health Subcommittee held a hearing on recent policy changes implemented or proposed by the Bush Administration in the State Children's Health Insurance Program (SCHIP) and Medicaid. Taken together, the policy changes would lead to reduced funding to the states, cuts in the number of children covered, reductions in health services provided and cuts in payments to providers. Governors Ted Strickland (D-OH), Deval Patrick (D-MA) and Christine O. Gregoire (D-WA) urged Congress to rescind a Bush directive that would reduce the number of children that could be covered by SCHIP. The directive essentially prevents states from providing coverage to kids in families with incomes above 250 percent of the federal poverty level, or $42,925 a year for a family of three.

These Democratic governors were joined by Gov. Haley Barbour (R-MS) in criticizing new Medicaid regulations that would reduce Medicaid payments to the states by approximately $13 billion over five years. The changes would impact how Medicaid pays for hospital services, graduate medical education, outpatient services, school-based health services, services for individuals with disabilities, and case management services.
(Barbara Coufal- [e-mail])

Senate Passes Indian Health Bill with Delay on Medicaid Case Management Regulation
The Senate passed a reauthorization of the Indian Health Service (S. 1200) that includes a provision to block implementation of a regulation governing federal payments for case management services provided by state Medicaid programs until April 1, 2009. The regulation is otherwise scheduled to go into effect March 3, 2008 and would shift $1.28 billion in costs over five years to states. The House has not completed consideration of its companion Indian Health Services reauthorization bill.
(Linda Bennett- [e-mail])

Call Congress Tuesday, March 4th to Increase Child Care Funding!
Funding for child care has not been increased over the past seven years. AFSCME has joined together with other early childhood education and child care advocates to tell Congress that we need improvements in the quality of child care in America now.

Specifically, we need an increase of $874 million for the Child Care and Development Block Grant (CCDBG) and an increase of $1.072 billion for Head Start.

Quality child care makes it possible for families to work and for young children to enter school well prepared and ready to learn. With no increases again this year, 200,000 low-income children and their families will lose child care and 14,000 fewer kids will have access to Head Start. And child care providers will continue to have a hard time making ends meet for their own families. For more information please go to: http://action.nwlc.org/site/PageServer?pagename=marchforth.
(Becky Levin- [e-mail].)

Please call the Capitol switchboard at 1-888-460-0813 and ask to speak to your Senators and Representative. Tell them funding for child care is inadequate and we need real dollar increases in the Child Care and Development Block Grant ($874 million) and Head Start ($1.072 billion).

GAO Questions Benefit Package in Privatized Medicare Plans
The House Ways and Means Health Subcommittee heard testimony from the Government Accountability Office (GAO) that the privatized insurance plans offered as an alternative (not supplemental) to traditional Medicare cost taxpayers more. Further, the value provided to beneficiaries is not commensurate with the subsidies provided to insurance companies. Last year the Medicare program and taxpayers paid private Medicare Advantage plans $8.3 billion more than the traditional Medicare program would have spent on the same enrollees. Yet, only a relatively small share of those subsidies went to extra benefits for enrollees in the private Medicare Advantage plans. Despite subsidies to offer extra benefits, GAO found that a significant number of Medicare Advantage plans force beneficiaries to pay higher costs for hospital care, skilled nursing care, and home health care among other services than they would under traditional Medicare. Last year, the House passed legislation to reduce the subsidies to insurance companies that offer these private alternatives to Medicare and to use the savings to improve Medicare benefits for all enrollees.
(Linda Bennett- [e-mail])

President Bush Proposes Raising Medicare Drug Premiums for Retirees
As required under current law, congressional leaders introduced legislation proposed by President Bush to reduce general government revenue for Medicare to 45 percent of Medicare outlays. The so-called 45 percent trigger was included in the 2003 Medicare prescription drug bill as a way to force more Medicare costs onto beneficiaries, increase payroll taxes or both, which are regressive measures, rather than through general revenues, which are progressive. In accordance with statutory mandate, Majority Leader Steny Hoyer (D-MD) and Minority Leader John Boehner (R-OH), and Senators Max Baucus (D-MT) and Judd Gregg (R-NH), have introduced the President's bill (H.R. 5480/S. 2662) in their respective chambers.

If enacted, the Administration's proposal would force even higher costs on retirees by linking Medicare prescription drug premiums to a retiree's income, while protecting the escalating subsidies for private Medicare Advantage insurance companies. Because the means testing for the prescription drug premiums would not be indexed to inflation, more retirees with pensions would see higher premiums with each passing year.

Under the law, the House and Senate committees with jurisdiction over Medicare must consider the legislation by June 30 but can amend the bill to strip out the premium hikes and add other options, such as reducing subsidies for Medicare Advantage plans or allowing Medicare to negotiate drug prices for the Medicare drug benefit.
(Linda Bennett- [e-mail])

Comprehensive Child Welfare Reform Bill Introduced in House
Rep. Jim McDermott (D-WA), Chairman of the House Ways and Means Subcommittee on Income Security and Family Support, introduced the Invest in KIDS Act (H.R. 5466), comprehensive child welfare reform legislation. A hearing on the bill was held by the Subcommittee, as well.

H.R. 5466 establishes a new, state-option child and family services program. States could use these new federal funds to prevent abuse and neglect, and to reduce the number of children in foster care. The legislation also eliminates the current family income eligibility requirements for states to receive federal foster care and adoption reimbursements; establishes child welfare workforce grants aimed at improving quality by reducing caseloads, improving supervision, reducing turnover, and expanding training opportunities; extends federal child welfare training reimbursements to court personnel and other public and private agency staff who intersect with children in the child welfare system; and includes several other provisions that would strengthen kinship ties and address the educational and health care needs of children in the child welfare system.

While these child welfare reforms are positive, the legislation proposes to pay for them by reducing the federal match to states for administrative costs, and capping federal reimbursements for administration not related to child placement or case management activities. AFSCME opposes these funding approaches.
(Fran Bernstein- [e-mail])

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