Received by email in reply to my questions about Federal abortion funding. She sticks to the negative economic consequences of the legislation as her reason for voting against it. She also provides some very specific analysis of certain provisions, including weakened cost-containment features, impact on specific industries and companies in South Dakota, and a Federal takeover of certain educational grants and loans tucked into "Health Care" reform.
...The Senate health care bill, H.R. 3590, the Patient Protection and Affordable Care Act, passed the U.S. House of Representatives on March 21, 2010. I voted against this bill, as well as a separate bill, H.R. 4872, the Reconciliation Act of 2010, which made several changes to H.R. 3590.
As with the original House legislation, the final version of health care legislation that the Congress voted on does include a number of good provisions that I support. Provisions I strongly support include eliminating insurance companies' ability to exclude people with preexisting conditions or to cancel coverage when someone gets sick; allowing children to stay on their parents' insurance until age 26; creating transparent health insurance exchanges for individuals and small businesses, where private insurers compete for their business; and reauthorization of the Indian Health Care Improvement Act.
However, while supportive of such provisions to expand coverage, I ultimately was not able to support the bill because of its serious shortcomings related to cost and reform. For example, the amount of overall spending included in the bill to expand coverage increased significantly as the legislative process progressed. The Senate bill would have spent $875 billion, while the spending in the reconciliation bill grew to $938 billion.
At the same time, key cost containment measures were weakened in significant ways. For example, two provisions I support as important steps to help contain costs from within the health care system were changed through the process.
First, the proposed excise tax on high cost plans. In the Senate bill, this provision would have significantly reduced overutilization and reduced deficits. However, its thresholds were changed and watered down in the reconciliation bill, and the date it will go into effect was pushed back until 2018. This delay raises serious questions as to whether the excise tax will take effect at all. Indeed, some Members of Congress and others are already noting there is plenty of time to repeal it.
Secondly, the concept of an Independent Medicare Advisory Council, which is supported by the Administration and a number of health economists as a way to help Congress make the tough decisions that will guarantee the fiscal sustainability of our health care system, was weakened considerably. The new entity, known as the Independent Payment Advisory Board, doesn't even start to function until 2015, and some providers aren't subject to this oversight for a number of years.
In order to make up revenue that was lost through weakening of cost containment provisions, the reconciliation bill broadened the Medicare Hospital Insurance Tax base for high-income taxpayers. The provision raises more than half of the total revenue in the bill, but was not indexed for inflation. As we have seen repeatedly over the years with the Alternative Minimum Tax, the failure to index is a temporarily convenient mechanism that can make a bill look fiscally responsible now, but actually sets the stage for growing fiscal problems in the future.
Overall, the way the final bill took shape--with spending levels increasing, cost containment measures weakening, and the inclusion of an unindexed provision like the increased Medicare tax described above--gives added weight to caution expressed by the nonpartisan Congressional Budget Office in its March 20, 2010 report on the legislation: "The reconciliation proposal and H.R. 3590 would maintain and put into effect a number of policies that might be difficult to sustain over a long period of time. Under current law, payment rates for physicians' services in Medicare would be reduced by about 21 percent in 2010 and then decline further in subsequent years; the proposal makes no changes to those provisions.The projected longer-term savings for the legislation also reflect an assumption that the Independent Payment Advisory Board established by H.R. 3590 would be fairly effective in reducing costs beyond the reductions that would be achieved by other aspects of the legislation."
The legislation also significantly increases Medicaid costs for South Dakota. The State of South Dakota has projected that, from 2010 to 2019, the Medicaid costs for South Dakota increase significantly from the Senate bill, rising from $53.7 million to $62 million with the changes made through the reconciliation bill. For each year after 2019, the state has projected about $36 million in increased general fund costs for Medicaid. These costs are of increasing concern given the current economic and budget environments at the state level.
I am also very concerned about a last-minute change made in the manager's amendment to the reconciliation bill on Saturday, March 20, 2010, the day before the House vote, that adjusted the medical device tax in the legislation to apply the tax to many Class I devices. 3M Company, which has facilities in Aberdeen and Brookings that employ 700 and 900 people respectively, manufactures a number of Class I items in South Dakota that may be subject to the tax. 3M Company is concerned that the tax will increase costs to health care consumers because of added costs to product innovation designed to improve quality and efficient health care outcomes.
You may know that the reconciliation bill also included provisions mandating that, beginning July 1, 2010, the federally-guaranteed loans made through the Federal Family Education Loan Program (FFELP) will be terminated and all new federal student loans will be originated through the Direct Loan program administered by the federal government. These provisions could threaten jobs in South Dakota, even though there was a fiscally responsible alternative proposed. The alternative would have made the same historic investments in higher education as the provisions in this bill, as well as providing mandatory funding for Pell Grants, early childhood education programs, and a higher level of assistance for community colleges, while still maintaining a role for the private sector in originating student loans. Unfortunately, this alternative was rejected.
I listened closely to thousands of South Dakotans throughout this process, and while it is clear to me that the majority of my constituents either do not support this health care bill or have serious reservations about certain elements of it, most agree that some essential reforms must be made. I will continue to work to improve this new law, and make changes necessary to achieve responsible, sustainable health care reform for all South Dakotans...
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